Biggert-Waters Flood
Insurance Reform Act of
2012 (BW12)
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Biggert-Waters Flood
Insurance Reform Act of
2012 (BW12)
Understanding the October 1, 2013 Changes
BW-12 Implementation Timeline
DATE
BW-12 IMPLEMENTATION STEP
July 6, 2012
BW-12 enacted; reauthorizes the NFIP for five years and
requires FEMA to eliminate certain discounts and subsidies
January 1, 2013
Upon policy renewal, subsidized rates began to phase out for
non-primary residences
October 1, 2013
Upon policy renewal, subsidized rates will begin to phase out
for business properties, SRL properties, and others.
Immediate move to full-risk rates after sale/purchase of
property, or policy lapse.
Late 2014
FEMA anticipates implementing Section 100207 of BW12
(grandfathering, map changes, etc.)
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BW-12: What’s Changing?
 Certain subsidized policies will be phased out at a
rate of 25% per year until they reach the full risk rate:
 Non-primary residences (January 1, 2013);
 Business properties ; and
 Severe repetitive loss properties (1-4 family residences), and properties where
claims payments exceed fair market value
 Primary residences in Special Flood Hazard Areas will
be able to keep their subsidized rates unless or until:
 The property is sold / purchased;
 There is a lapse in insurance coverage; or
 They suffer severe, repeated flood losses.
 The full risk rate will be immediately applied to properties with a sale or lapse
in coverage on or after July 6, 2012.
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Percent of subsidized Policies per
state (as of December 31, 2012)
http://www.fema.gov/bw12
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Interactive Map
http://www.fema.gov/bw12
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When Maps Change
 Phase in will apply for all new Flood
Insurance Rate Maps (FIRMs) that are
adopted by communities on or after July
6, 2012
 Expected to be implemented late 2014
 Premiums will transition from the current
premium to the new premium over 5 years
in 20% increments.
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Notice to Policyholders
 W-13016 (March 29, 2013)
 October 1,2013, Program Changes
 W-13033 (June 14, 2013)
 Procedures for Processing Renewals of Certain Pre-FIRM
Subsidized Policies that are New, Lapsed, or Assigned
 W-13041 (July 10, 2013)
 Additional Guidance on the Procedures for Processing
Renewals of Certain Pre-FIRM Subsidized Policies that are
New, Lapsed, or Assigned
 W-13046 (August 8, 2013)
 Final Letter Related to Processing Renewals of Certain Pre-
FIRM Subsidized Policies that are New, Lapsed, or Assigned
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W-13041
http://www.nfipiservice.com/Stakeholder/pdf/bulletin/w-13041.pdf
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WYO Bulletin W-13041
Documentation needed :
 Elevation Certificate
 Clear exterior photographs of the front and back of the
building
 Application completed and signed by the agent
 Annual premium determined with full-risk premium rates or
tentative premium rates
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WYO Bulletin W-13046
Final Letter Related to Processing Renewals of Certain PreFIRM Subsidized Policies that are New, Lapsed, or Assigned:



New policies written with an effective date on or after
July 6, 2012
Policies written as new business, or existing policies
assigned to a new owner as a result of a property
purchase on or after July 6, 2012
Policies that have lapsed and been reinstated on or
after October 4, 2012
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W-13046
http://www.nfipiservice.com/Stakeholder/pdf/bulletin/w-13046.pdf
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Example #1: Buying/Selling a House in
a Special Flood Hazard Area
 Flood insurance required
For Sale
 Full-risk rates apply, not pre-FIRM
subsidized rates
 Plan ahead: consider risk as you plan
and budget
 Obtain an Elevation Certificate (EC)
as soon as possible to learn your fullrisk rate – you could save money
 Consider mitigating, including
elevating the home, before listing it
for sale
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Example #2: Building/Rebuilding a
Home in a Special Flood Hazard Area
 Be aware of building in a high-risk flood
zone
 Risk changes over time, so consider
current and future flood risks
 Build higher/stronger than current
standards to lower risk and flood
insurance premiums
 Talk to local floodplain manager to learn
about new maps or data that may be
available
 Building higher may increase home value
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Example #3: Policy Renewal
(Subsidized) Primary Home
Policy purchased Prior to July 6, 2012
 Retain subsidized rate as long as home is
a primary residence and continuous
coverage is maintained
 Rates subject to routine actuarial
adjustment plus increase for Reserve Fund
 Effective after October 2013, full-risk
rates would apply if :
•
New purchase
•
Policy lapses
•
Severe Repetitive Loss
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Example #4: Policy Renewal (Subsidized)
SRL Home, Non-Primary or Business
Property
 Previous premium did not reflect the home’s full
flood risk
 Premium will increase 25 percent a year until it
reaches the full-risk rate
 Rates subject to routine actuarial adjustment
plus increase for Reserve Fund
 Obtain an Elevation Certificate (EC) as soon as
possible to learn your full-risk rate – you could
save money
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Saving Money on Flood Insurance
 FEMA has programs to help owners reduce their risk and save
money on flood insurance
• Community-wide discounts through the Community Rating System (CRS)
• FEMA grant programs support rebuilding and relocating
• Use of higher deductibles to lower premium costs
But the smartest way to save
may be to build higher
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Elevation
Certificate
Address Your Risk
LEARN YOUR RISK
Get an Elevation
Certificate for your home
(risk can change)
GET
INSURED
REDUCE
YOUR
RISK
Building or
Rebuilding?
Build
Higher
Than
current
standards
Resilient
Be
proactive:
don’t risk the
Dconsequences
of a flood
STAY INSURED
Letting your flood
insurance policy lapse
could be costly
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Tools and Resources
Insurance Agent
Training & Info
 Sign up for WYO Alerts – http://www.nfipiservice.com/mailing_list.html
 Toll Free numbers : http://www.nfipiservice.com/storm_sandy.html
 Training is available through FEMA for insurance agents, adjusters and lenders
www.fema.gov/business/nfip/trainagt.shtm
 Sign up for agent training emails -
https://public.govdelivery.com/accounts/USDHSFEMA/subscriber/new?topic_id
=USDHSFEMA_212
 NFIP Training offers workshops and webinars
http://www.nfipiservice.com/training/schedule_agents.html
 YouTube BW12 Video
http://www.youtube.com/watch?v=tpeqSQr3ngY+
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Resources
 Fact Sheets - http://www.riskmap6.com/Resources.aspx
 FloodSmart for Consumers - www.FloodSmart.gov
 FloodSmart for Agents – www.Agents.FloodSmart.gov
 Flood Insurance Manual - http://www.fema.gov/flood-insurance-manual
 Risk Communication Guidebook for Local Officials -
http://www.riskmap6.com/guidebook.aspx
 Flood Insurance Reform Act Webpage - http://www.fema.gov/bw12
 Audio PPT in English – Understanding the Impacts of the NFIP -
http://www.riskmap6.com/documents/resource/Changes%20to%20the
%20NFIP-%20Understanding%20BW12_Stakeholder_AudioPPT.ppt
 NFIP iService Bureau - http://www.nfipiservice.com
 Region 6 Mitigation - http://www.fema.gov/region-vi-mitigation-division
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FEMA Region 6 – Jack.Graham@fema.dhs.gov
Lisa.Jennings@fema.dhs.gov
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