NC Department of Revenue
2013 Advanced Real Property Seminar
Biggert-Waters National Flood Insurance
Reform Act of 2012
John Gerber, PE, CFM
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood
Insurance Program Reform Act
of 2012
 Signed into Law July 6, 2012
 Extends financing & authority for the NFIP
through September 30, 2017
 Since 2008 Congress passed 18 stop-gap
extensions
 Sited as BW 12
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood Insurance
Program Reform Act of 2012
Pre-FIRM subsidies to be phased out (rates increase 25% per
year)
 Non-primary residences (living in the home < 80% of the time)
~ 305,000 nationally & 4759 NC pre-FIRM subsidized policies will
begin phasing into full risk rates. Rates will increase on average
over 150 percent

Business properties and Severe Repetitive Losses
~ 90,000 nationally and 2143 NC commercial properties and
11,000 nationally & 707 NC SRL properties will begin phasing in to
full-risk rates.
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood Insurance
Program Reform Act of 2012
Pre-FIRM subsidized rate to full risk rate for :





The sale or purchase of property
A lapse in insurance coverage
Substantial damage or substantial improvement (30%)
Properties uninsured as of BW-12 enactment
Refuses mitigation grants
~ 650,000 nationally and 7,728 NC existing pre-FIRM policies will
convert to full-risk rates when sold to a new owner
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood Insurance
Program Reform Act of 2012
Grandfathering To Be Phased Out:
 For any property newly mapped into SFHA or subject to a
revised map: any property located in an area that is participating in the
national flood insurance program shall have the risk premium rate
charged for flood insurance on such property adjusted to accurately
reflect the current risk of flood to such property,
 Anticipated to take effect 1 October 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%
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood
Insurance Program Reform Act
of 2012
 Average of 10% increase after Oct. 1, 2013
 V Zone – Post-FIRM 11%, Pre-FIRM 17%
 AE Zone – Post-FIRM 6%, Pre-FIRM 16%
 Zone A – 8%
 X Zones – Standard 8%, PRP 1%, ext. 19%
North Carolina Emergency Management
Floodplain Management Section
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood Insurance
Program Reform Act of 2012
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
Subsidized rates phased out for non-primary residences
October 1, 2013
Subsidized rates anticipated to phase out for business properties,
SRL properties, and others. Move to full-risk rates after
sale/purchase of property, substantial damage/improvement or
policy lapse.
October 1, 2014
FEMA anticipates implementing phase-in of full risk rates for
properties affected by map changes (loss of grandfathering)
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood Insurance
Program Reform Act of 2012
 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
North Carolina Emergency Management
Floodplain Management Section
Biggert-Waters Flood Insurance
Program Reform Act of 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
 Study of the capacity of the private reinsurance market
North Carolina Emergency Management
Floodplain Management Section
Insurance discount for freeboard
Coverage: $250K Building/$100K contents
QUESTIONS??
North Carolina Emergency Management
Floodplain Management Section
Premium Increases Due to Reform Act
Coverage
Zone Pre-FIRM At BFE
Premium
AE
$100k Building/
$40K Contents VE
1 foot
below
2 feet
below
3 feet below
$1,410
$1,465
$3,796
STR
STR
$2,472
$3,412
$4,572
$6,192
$7,380 (199%)
PRP
$312
AE
$2,716
$1,643
$4,850
STR
STR
$5,663
$6,760
$9,080
$12,320
$14,696 (160%)
STR
STR
$200k Building/
$80K Contents VE
PRP
$390
AE
$3,441
$1,732
$5,377
$7,599
$8,434
$11,344 $15,384
$250k Building/
VE
$100K Contents
PRP
$414
October 1, 2013 Rates - provided by Spencer Rogers, NC Sea Grant
North Carolina Emergency Management
Floodplain Management Section
$18,354 (142%)
North Carolina Emergency Management
Floodplain Management Section
North Carolina Emergency Management
Floodplain Management Section
North Carolina Emergency Management
Floodplain Management Section
North Carolina Emergency Management
Floodplain Management Section
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
North Carolina Emergency Management
Floodplain Management Section
Top 10 CRS Community Savings
COMMUNITY
CRS
CLASS
NUMBER OF
POLICIES
ANNUAL SAVINGS
Dare County
8
9,989
$659,313
Nags Head
6
3,729
$657,921
Ocean Isle
8
2,991
$618,380
Kill Devil Hills
6
4,467
$556,602
Carolina Beach
7
3,944
$492,947
Oak Island
8
3,622
$479,593
Holden Beach
8
1,965
$429,087
Topsail Beach
6
1,124
$353,883
Carteret County
8
4,246
$277,914
Wrightsville
8
2,717
North Carolina Emergency
Management
Floodplain Management Section
$266,331
QUESTIONS??
North Carolina Emergency Management
Floodplain Management Section