On October 1, 2018, the Federal Emergency Management Agency (FEMA) issued Bulletin W-18021 announcing changes to the National Flood Insurance Program (NFIP) that will be implemented effective April 1, 2019 and January 1, 2020.
Most notable among these changes include the following:
NFIP Changes Effective April 1, 2019
- Updated Premium Rates: Premiums will increase by an estimated average of 8.2% to comply with the requirements of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA)
- Severe Repetitive Loss (SRL) Premium: FEMA will introduce an SRL premium of 5% for policies covering properties with an SRL designation
- Primary Residence Guidance: Will allow a 2-4 Family building to be a primary residence for the purpose of assessing the HFIAA surcharge
- Declarations Page Requirement to Clear Communication of Risk: The Write Your Own companies and NFIP Direct Servicing Agent are required to include the following message on the Policy Declarations page: "Refer to www.fema.gov/cost-of-flood for more information about flood risk and policy rating"
NFIP Changes Effective January 1, 2020
- Updated Premium Rates:
- Preferred Risk Policies (PRPs) and AR and A99 zone policies eligible for the PRP will increase by 5%
- Updated premium multiplier tables for policies rated under the Newly Mapped procedure will result in a premium increase of 15%
This information is meant to be informational only. Your lending intuition is not necessarily required to take any action as a result of these changes.
If you have any questions, please reach out to us through our website, contact our loan servicing compliance team, or reach out to your Allied representative directly.
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