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 -
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
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
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
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
Non-Residential Contents Coverage: Basic limit increases from $130,000 to
The NFIP is discontinuing the $500 deductible for all properties. Pre-FIRM
buildings in Special Flood Hazard Areas (SFHAs) will have a $2,000 standard
deductible. Post-FIRM buildings and Pre-FIRM buildings rated as Post-FIRM in
SFHAs will have a $1,000 standard deductible. Buildings in non-SFHAs will have a
$1,000 standard deductible.
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
In Zone V areas
(coastal high-velocity zones), rate increases are being implemented this year as
a result of a study of coastal erosion, which indicates that current rates
significantly underestimate the increasing hazard from steadily eroding
coastlines. Both Post-FIRM and Pre-FIRM Zone V premiums will increase 10
In Zone A areas
(non-velocity zones, which are primarily riverine zones), Post-FIRM A1-A30 and
Zone AE premiums will increase 10 percent. In Pre-FIRM Zone AE, premiums will
increase 10 percent to slightly decrease the amount of subsidy in the Pre-FIRM
rate. Zone AO and AH areas (shallow flooding zones) will have a premium
increase of 8 percent. In unnumbered Zone A (remote Zone A areas where
elevations have not been determined), the premiums will increase 10 percent.
Zone A99 (approved flood mitigation projects, e.g., levees still in the course
of construction) and Zone AR will have a premium increase of 10 percent.
In Zone X
(zones outside the Special Flood Hazard Area) Standard Risk Policy), premiums
will increase 8 percent. The Preferred Risk Policy (PRP) premiums will remain
Mortgage Portfolio Protection Program (MPPP)
premiums will increase about 10 percent.
Rating and Condominium
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.
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,
Revisions to this section clarify the appropriate zone to use for
unmapped areas or community incorporations.
Community Rating System
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.
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