Biggert-Waters
NFIP Reform Act of 2012
For Surveyors
y
and Engineers
g
December 3,, 2013
Bill Tingle PG, CFM
Biggert-Waters National Flood Insurance
Program Reform
f
Act off 2012
(
(BW-12)
)
 Signed into Law July 6, 2012
 Extends financing & authority for the NFIP
through September 30, 2017
 Since 2008 Congress passed 18 stop
stop-gap
gap
extensions
 Sited as BW 12
BW-12
Subsidized flood insurance policies being phased out
(About 20% of all flood insurance policies)
Rate increase 25% per year for 4 years to actuarial rates for….
 Non
Non-primary
primary residences (living in the home < 80% of the
time)
305,000 nationally & 4759 NC pre-FIRM subsidized policies
begin phasing into full risk rates.
rates Rates will increase on average
over 150 percent

Business
i
properties
i and
d Severe Repetitive
i i Losses
- Commercial - 90,000 nationally and 2143 NC
- Severe Rep Loss - 11,000 nationally & 700 NC
Began January 1,
1 2013
BW-12
Primary, residential buildings may keep cheaper
…UNLESS….
 Property is sold (or purchased)
 There is a lapse in insurance coverage
 Substantial damage or substantial improvement (30%)
occurs
 Building is uninsured as of BW-12 enactment
 A mitigation grant is refused
650,000 nationally and 7,728 NC existing pre-FIRM policies
convert to full-risk rates when sold to a new owner
Subsidized rates will move DIRECTLY to full risk rate
(no 25% increase/year over 4 years)
Bega
an Octo
ober 1, 2013
subsidized (Pre-FIRM) rates forever…
BW-12
Grandfathering To Be Phased Out:
Throughout history of NFIP – rates based on FIRM in effect when house
built. If BFE increased on new map, rates grandfathered to cheaper rates
because house was built in compliance.
 BW-12 - For any property newly mapped into SFHA or subject to
a revised map
p WILL PAY ACTUARIAL RATES
 Anticipated to take effect October 1, 2014.
 Rates to increase 20% each year for 5 years until they reach full
actuarial rates for the map in effect.
~ 515,000 grandfathered policies, premiums may increase 200%
Biggert-Waters
gg
Flood
Insurance Program Reform Act
of 2012
 Average of 10% increase after Oct. 1, 2013
 V Zone – Post
Post-FIRM
FIRM 11%, Pre-FIRM
Pre FIRM 17%
 AE Zone – Post-FIRM 6%, Pre-FIRM 16%
 Zone A – 8%
 X Zones – Standard 8%, PRP 1%, ext. 19%
BW-12
DATE
BW-12 IMPLEMENTATION STEP
July 6, 2012
BW-12 becomes law; reauthorizes the NFIP for five years and
requires FEMA to eliminate most discounts and subsidies
January 1, 2013
2nd Homes, Commercial –Phase Out
October 1, 2013
Single family Pre-FIRM – Direct Full Risk Rates
No 25% increase each year.
*sale/purchase of property,
*Policy Lapse
*substantial damage/improvement 30%.
October 1, 2014
Grandfathering Phase Out
BW 12
BW-12
 Streamlines FMA, RFC and SRL program to allow mitigation of
repetitive or severe repetitive loss structures;
 Creates a reserve fund
 Establishes the TMAC to advise FEMA administrator and SRP
 Modifies use of CDBG funds to include flood insurance outreach and
community building code administration
Biggert-Waters Flood Insurance
P
Program
R
Reform
f
A
Actt off 2012
 Greater civil penalties for lender non-compliance ($350 to $2,000)
 Lenders required to escrow and maintain control of claim payments
 Study the economic cost of vouchers for low-income
 Studyy of the capacity
p
y of the private
p
reinsurance market
Insurance Cost
Coverage: $250K Building/$100K contents
Q
QUESTIONS??
Example Rates for Various Floor Elevations
4’ Below BFE
At BFE
3’ Above BFE
AE (el 14’)
BFE -9’
Premium ~$20,400/yr
BFE -9’
Premium ~$20,400/yr
~$20 400/yr
AE ((el 14’))
Premium
Present: ~$3400
Pending:
P di
$51
$51,000/yr
000/
Pre-FIRM
Pre2007 VE (el 16’)
16 )
Now: BFE -10
10’’
Biggert-Waters
Biggert
Waters Flood Insurance Program
Reform Act of 2012
September 2013
U.S. Rep. Maxine Waters introduced the
Homeowners Flood Insurance Affordability Act last
month.
Purpose is to delay implementation of BW12 until
Affordability Study is completed.
completed
Determining Flood Insurance Rate - Zone AE
Elevation Certificates and BW-12
 Elevation Certificates will be
required for all pre-FIRM
buildings to be actuarially rated
 An extremely high premium will
be enforced without an EC.
 Rates generally based on
difference between lowest floor
and
d BFE
 Flood Insurance requirement
may be removed if EC shows
LAG at or above BFE
((LOMA,
O
, LOMR-F)
O
)
The Elevation Certificate
 Administrative tool
of the NFIP
 Policy rating
 Support of map
revisions and
amendments
 Certify building
elevations
 Community
compliance
Sections A - G
Section A
FEMA Non Engineered Opening
R i
Requirements
t
Must have a Minimum of Two Openings
 One sq/in per 1 sq/ft of enclosed area
 Bottom of opening within 1’ of adjacent grade
 Any louvers, screens, or other opening covers
must not block or impede the automatic flow of
Floodwaters into and out of the enclosed area.
 Openings must be permanently open
Vent Options
p
Typical
Air Vent
Screened
Wood Frame
Louvered
Air Vent
Block Turned
Sideways
Return
V t
Vents
Lowest Floor for Flood Insurance Rating
With Proper Vents in Crawlspace
$700 / year
Lowest
Floor
+ 2.0 Feet
Opening
(typical)
BFE
Lowest Floor for Flood Insurance Rating
Without Proper Vents in Crawlspace
$2 700 / year
$2,700
Lowest
L
Floor
- 1.0
1 0 Feet
BFE
Lowest Floor for Flood Insurance Rating
With Proper Vents
Lowest
Floor
+ 2.0 Feet
Opening
(typical)
BFE
Lowest Floor for Flood Insurance Rating
Without Proper Vents
Lowest
Floor
- 1.0
1 0 Feet
BFE
Section - B
Section C
Lowest Adjacent Grade
Elevation of g
ground,, sidewalk,, patio,
p
, or
deck support immediately next to
building
Lowest ground elevation touching
structure or supporting
i members
b
off
structure
Definition of Lowest Floor
 Lowest
L
t floor
fl
off llowestt enclosed
l
d area,
including basement
 Unfinished or flood-resistant enclosures,
used solely for parking of vehicles,
building access, or storage in areas
other than basements are not
considered lowest floors

PROVIDED that such enclosures are not
built to render structure to be in violation of
applicable
non elevation design requirements of a
non-elevation
community’s ordinance
Low Floor (LF) For Insurance Rating
Diagram 1-A
Slab on Grade
Low Floor (LF) For Insurance Rating
Diagram 1-B
1B
Raised Slab
Low Floor (LF) For Insurance Rating
Diagram 1-B
With Attached Garage
Low Floor (LF) For Insurance Rating
Diagram 9
S bG d C
Sub-Grade
Crawll Space
S
Low Floor (LF) For Insurance Rating
Diagram
g
2
Basement
Low Floor (LF) For Insurance Rating
Diagram 8
Crawl space, openings
Low Floor (LF) For Insurance Rating
Diagram 8
Crawl space,
space No Openings
Flood Insurance Rating
Elevation Determination
Difference, measured in feet, between the
lowest floor elevation and the BFE for
that zone.
The elevation difference can be a number of
feet above (+) or below (-)
( ) the BFE.
BFE
0.1’ Can Make $$Thousands
Difference in Annual Premium
• Insurance agent must apply the rounding rule to the
difference between the elevation of the lowest floor
and the BFE.
• Round to nearest whole number
• If the difference is negative (floor below BFE), the
final figure is rounded up from .5.
5
• If the difference is positive (floor above BFE), the final
figure is rounded up from .5.
• Always round to the higher elevation
Q
Questions?
ti
?