FEMA Announces BW-12 Program Changes
On December 16th of 2013, FEMA issued a Memorandum to all of its Write Your Own (WYO) and National Flood Insurance Program (NFIP) Servicing Agents to notify them of the pending changes to the NFIP Program scheduled for June 1, 2014. The changes are a result of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) .
Some of the significant changes include:
- New maximum limits, under the Standard Flood Insurance Policy (SFIP) General Property Form. Maximum limits increased from $250,000 to $500,000 for non-commercial, residential buildings of 5 or more units;
- Changes to the minimum deductible amounts for new business and renewals on or after June 1, 2014. Insurers must advise policyholders of new minimum as part of the renewal process. Revised minimum deductibles;
Full-Risk Rated Policies
- Policies rated with full-risk rates (Post-FIRM, Pre-FIRM elevation-rated, and all X-zone rated policies) or in AR, AR dual, or A99 zones will have a minimum deductible of $1,000 for building coverage and $1,000 for contents coverage if the building coverage does not exceed $100,000.
- Policies rated with full-risk rates or in AR, AR dual or A99 zones will have a minimum deductible of $1,250 for building coverage and $1,250 for contents coverage if the building coverage exceeds $100,000.
Pre-FIRM Subsidized Policies
- Policies rated with Pre-FIRM subsidized rates will have a minimum deductible of $1,500 for building or contents coverage if the building coverage does not exceed $100,000.
- Policies rated with Pre-FIRM subsidized rates will have a minimum deductible of $2,000 for building or contents coverage if the building coverage exceeds $100,000.
Contents-Only Policies
- Contents-only policies will use the same minimum deductibles that apply to building coverage that does not exceed $100,000.
- Revised non-primary residence definitions. Effective June 1, 2014, the NFIP will implement this provision by defining primary residence to be a building that will be lived in by the insured or the insured’s spouse for more than 50 percent of the 365 days following the policy effective date. Down from the 80% threshold that took effect on January 1, 2013.
Read the full text of the memo as well as the published summary below.