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What You Need To Know About Flood Insurance

Due to the implementation of the Biggert-Waters Act of 2012, the world of flood insurance has been turned upside down. There will be properties never before required to get flood insurance that will now require it because the flood insurance maps are being redrawn. Additionally, the rates for properties are increasing. Rates are dependent on a number of factors such as the age of structure and what flood zone the property resides. New coastal maps are becoming effective: Newport County coastal maps became effective September 4th, with Kent and Providence Counties due to become effective September 18th. Washington County will follow on October 16, 2013.

To find out if a property is a NEW or existing flood zone, go to and type in the property address. This will give a quick, but not highly accurate, view of whether and what type of flood risk the property MAY have. In order for it to be a certainty, it will be necessary for a home owner to get a professional licensed surveyor to conduct an elevation study (at a cost of estimated $500 - $800) in order to get an elevation certificate. This will allow the risk to be assessed and an insurer to accurately quote the new flood insurance rates. There is a list of qualified insurers who are familiar with the new policy on the website. Presently, most insurers are not able to rate to new maps.

Find a Property's Flood Risk | RIEMA - Rhode Island Floodplain Mapping Tool

Here is a synopsis of a highly complicated federal law/regs for housing in a flood zone (either newly classified as there or having been classified previously):

The reauthorization applies to certain structures built prior to the first flood insurance rate map in a community (Pre-FIRM) as well as policies based on the map in effect when the structure was built, otherwise known as grandfathering. For residents who

own properties that are located in flood-prone areas, these changes by Congress may cause flood insurance premiums to increase as much as 25% annually. The new law aims to reflect full risk and phase out subsidized rates for certain types of policies


  • Secondary homes in a Special Flood Hazard Area (SFHA) currently paying subsidized rates
  • Commercial properties in a SFHA currently paying subsidized rates
  • Multi-family residences (1-4 units) that have suffered severe repetitive losses (SRL)
  • Properties that have incurred flood-related damages in which accumulated claims payments have exceeded the fair market value of the property
  • * Renewals of policies receiving subsidized rates and covering a property purchased on or after July 6, 2012, are subject to full-risk rating on the first renewal effective on or after October 1, 2013.

    * Standard rated policies will increase an average of 10%. Specific zone increases are as follows:

    • V Zone (Post-FIRM):11%
    • V Zone (Pre-FIRM): 17%
    • A Zone (Post-FIRM): 6%
    • A Zone (Pre-FIRM): 16%

    The law is also calling for a phase-out of discounts and grandfathered rates and a move to risk-based rates when policy holders get re-mapped into a high risk area. This phase-out will take place in 20-percent increments annually over the course of five years and is expected to begin in 2014.


    The property would be in violation of the mortgage covenants and the lender has the right to foreclose.

    HOW COULD THIS HAPPEN? This program has lost $19 billion dollars and the only way to even have federal flood insurance was to make those who have the risk pay for it.

    Find out more by attending the Rhodes Summit on October 17th (register here ) or by taking one of the FEMA Classes at RIAR:

    Other resources:

    Category: Insurance

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