The Biggert-Waters Flood Insurance Reform Act of 2012 was seen by many as long overdue legislation aimed at the country’s National Flood Insurance Program. After the likes of Katrina and a handful of other hurricanes and tropical storms put the national program $24 billion into debt, it was clear that measures had to be taken to make the NFIP more stable.
The BW-12 and Insurance
One of the ways the Biggert-Waters Flood Insurance Reform Act of 2012 sought to enact meaningful change was by adjusting the insurance rates they offered, so as to make them better reflect the risk that customers actually faced.
This doesn’t mean everyone will see their rates increase, of course. However, events leading up to the Biggert-Waters Flood Insurance Reform Act of 2012 made it clear that some areas were grossly underpriced for insurance, given what their true risk really was.
Your Insurance Rates
As everyone will be affected differently by the Biggert-Waters Flood Insurance Reform Act of 2012, it behooves everyone to look into what their insurance rates will now be. Many people who think they are untouched by legislation may find an unpleasant surprise in the Act.
Two groups are especially vulnerable under BW-12, in light of their historical insurance rates.
Buildings that Sit Below Base Flood Elevation
The Base Flood Elevation (BFE) is the elevation required under the National Flood Insurance Program, where a structure needs to be flood-proofed. It’s the level floodwater is anticipated to reach during a base flood.
In the past, many building owners received discounted rates from FEMA, despite falling below BFE. The BW-12 now puts an end to most of that. So, even if your building was up to code when you had it built, if it falls under BFE now, you can expect to pay more.
Structures that Had Been Grandfathered In
Many building owners have benefited from having their original rating grandfathered in, even after better information came to the table. Under BW-12, most of those scenarios will no longer stand.
For example, these included structures built before 1975 or before their local area was assigned a Flood Insurance Rate Map. Many buildings in these instances were insured with pre-FIRM rates. BW-12 will more than likely make rates in these situations increase.
Though the reform was long overdue and comes with the best intentions, many people will find that it means they’ll be paying a lot more in the future. Give us a call at Williams Agency to discuss how it might be affecting you. We’re one of the few agencies that can offer you coverage without requiring an expensive elevation certificate.