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DHS FEMA NFIP Services - eWaterwark Article
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Tracking Severe Repetitive Losses
FEMA is committed to eliminating or reducing damage to properties that are caught in the flood-repair-flood-repair cycle.
Through the Flood Insurance Reform Act (FIRA) of 2004, Congress authorized a pilot program to mitigate the most severe
of these repetitive loss properties. As of March 2006, approximately 8,300 properties insured by the NFIP had reported
so many losses or costly claims that they were categorized as "severe repetitive loss properties" and were placed into
the new pilot program to track their mitigation. Included were some properties whose policies were formerly assigned
to the Repetitive Loss Target Group, which has been phased out (see below). Effective January 1, 2007, all policy
transactions for Severe Repetitive Loss properties must be processed by the NFIP Special Direct Facility (SDF).
The Severe Repetitive Loss Program now includes any NFIP-insured property that has met at least one of the following
paid flood loss criteria since 1978, regardless of ownership:
- Four or more separate claim payments of more than $5,000 each (including building and/or contents payments); or
- Two or more separate claim payments (building payments only) where the total of the payments exceeds the current
market value of the structure.
In either case, two of the claims payments must have occurred within 10 years of each other. Multiple losses at the
same location within 10 days of each other are counted as one loss and the payment amounts are added together.
The strategy for reducing the number of Severe Repetitive Loss properties is twofold. First, the NFIP has centralized
in the SDF the processing of all flood insurance policies of these properties to obtain additional underwriting
information, verify loss information, and collect information about their flood risk. Second, FEMA is implementing a
new mitigation grant program authorized by FIRA 2004 to mitigate these properties.
WYO companies and the NFIP Servicing Agent are notified 150 days prior to expiration of NFIP policies being moved to
this group that renew on or after January 1, 2007. Ninety days before the expiration of the policy term, the WYO
company notifies the policyholder, mortgagee, and agent of record about the movement of this property into the Severe
Repetitive Loss group. Policyholders should continue to contact their agent directly for any service needs on the
policy because he or she will remain the agent of record throughout the time that the property is in this group.
Policies with effective dates on or after October 1, 2006, that are currently written through the SDF as part of the
Repetitive Loss Target Group program, but do not match the loss characteristics of the new Severe Repetitive Loss
group, are being identified by the NFIP Bureau and SDF. The SDF will notify the policyholder, mortgagee, and agent at
least 90 days prior to the renewal date that their flood insurance may now be issued through a participating WYO
Company or the NFIP Servicing Agent.
The
new mitigation grant program authorized by FIRA 2004 may provide Federal grant funds to pay for up to
75 percent (up to 90 percent if certain state mitigation floodplain requirements are met) of the cost of
eligible mitigation activities, such as elevating the policyholder's building. Mitigated properties may
qualify for reduced flood insurance rates. Additional information about FEMA's Hazard Mitigation
Assistance programs is available on FEMA's website and from local floodplain managers and state hazard
mitigation officials.
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| Last Modified:
Friday, 21 January 2011 |
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