October Changes

October 2009 marks a period of significant change in the National Flood Insurance Program(NFIP). The latest Rate and Rule changes have been finalized, and several aspects of the Flood Insurance Manual have been expanded or adjusted accordingly. Here are some of the key revisions that have been made to the Program effective October 1, 2009.  The October 2009 edition of the NFIP Flood Insurance Manual can be found at [LINK - http://www.fema.gov/business/nfip/manual.shtm
 

The NFIP will require Write Your Own (WYO) companies to record the presentment of premium date and payee on all new business applications and money endorsements effective on or after October 1, 2009. The General Rules Section has been updated to clarify presentment of premium requirements for loan closings.

Underwriting Forms

Changes have been made to the Flood Insurance Application, General Change Endorsement, and Preferred Risk Policy Application forms. These forms now capture additional community, building, and construction information. In addition to providing grandfathering information on the revised Flood Insurance Application form, WYO companies must also include the grandfathering indicator on the front of the flood insurance policy declarations page.

Other notable changes include indicating whether the building is on Federal land, located over water, or under the condominium form of ownership. Companies must also report the source of the building construction date. In addition, a new rate type, Leased Federal Property, now appears on the Flood Insurance Application form.

Premium Increases in General

Premiums will increase an average of 8 percent for policies written or renewed on or after October 1, 2009.

Regular Program basic insurance limits are increasing for all categories of building and contents coverage as follows:
 

• 1-4 Family Dwelling Building Coverage: Basic limit increases from $50,000 to $60,000.

• Other Residential and Non-Residential Building Coverage: Basic limit increases from $150,000 to $175,000.

• Residential Contents Coverage: Basic limit increases from $20,000 to $25,000.

• Non-Residential Contents Coverage: Basic limit increases from $130,000 to $150,000.

Premium Increases in All Flood Zones

Keep in mind that the premium increases vary by zones as described below. If your company does not provide rating assistance, such as rating software, you can check the Manual for rating charts and other information before rating property. 

Rating and Condominium Sections

In accordance with the premium increases described, changes have been made to the rate tables and deductible factors located on pages RATE 1-13 and CONDO 8-22 in the Flood Insurance Manual.  

Two new building types have been added: elevated on crawlspace and non-elevated with subgrade crawlspace. Also, Pre-FIRM buildings in Unnumbered Zone A areas with a basement, enclosure, or crawlspace may use Post-FIRM rates if the rates are more favorable to the insured.
 

Lowest Floor Guide

Updated instructions reflect the two new building diagrams (1B and 9) in the 2009 Elevation Certificate. In addition, the section now contains new building drawings to assist in determining the lowest floor for buildings meeting these diagram descriptions.

Special Certifications

This section provides the new 2009 Elevation Certificate. Voluntary use of this form is being phased in over a one-year period ending April 1, 2010. Elevations certified on or after that date must be submitted on the new form.  The Floodproofing Certificate for Non-Residential Structures has been updated with a new expiration date of March 31, 2012.

Flood Maps

Revisions to this section clarify the appropriate zone to use for unmapped areas or community incorporations.
 

Community Rating System

As always, the Community Rating System Eligible Communities list has been updated to show changes to the status of some communities and to include new communities on the list. 

Leased Federal Property

In accordance with the provisions of the Flood Insurance Reform Act of 2004, Sec. 106, the Federal Emergency Management Agency (FEMA) will begin charging actuarial rates for a Leased Federal Property, which is any property leased from the Federal Government (including residential and nonresidential properties) that the Administrator determines is located on the river-facing side of any dike, levee, or other riverine flood control structure, or seaward of any seawall or other coastal flood control structure. A new section added to the Flood Insurance Manual provides guidelines for handling these properties.