When Congress mandated changes last year to the National Flood Insurance Program (NFIP), before Hurricane Sandy struck the Northeast, it meant flood insurance premiums for many homeowners in flood zones would rise. According to Smart Vent Products, Inc., that’s because for the first time, rates will reflect such factors as actual flood risk and major improvements to the property, while discounts will be phased out for non-primary residences and cases of repeat claims on the same property, among others. Some may see rates jump by 25 percent starting Oct. 1, 2013.
But even as affected homeowners face a potentially large hit to their wallets, opportunities to save significant money on premiums by meeting various criteria still exist. Under the NFIP reforms, the more you can do to reduce risk, the more you can reduce premiums.
“The best thing homeowners can do is to sit down with a Certified Floodplain Manager (CFM) and discuss your particular situation,” says Brian Shaw of Smart Vent. “A CFM can provide you with retrofitting solutions you can take to your agent and see what the reduction in premium will be.”
For example, by raising the home above the minimum required elevation standards or dry- or wet-proofing a non-residential building, owners can mitigate potential damage and therefore lower their premiums. Adding flood vents to foundations or installing breakaway walls are other ways to sharply reduce premiums.
In fact, Shaw notes, by coming into compliance with NFIP recommendations, owners can realize savings of up to 83 percent.
In a typical example, one New Orleans homeowner was paying $1,600 annually for flood insurance, post-Katrina. After discussion with his insurance agent, and consulting a Certified Floodplain Manager, he made modifications including installing automatic flood vents, which sent his premium plummeting to approximately $300 per year. His insurance company even sent him $1,300 back from the current year’s premium.
FEMA is also in the process of reviewing flood zone designations, and revising them as needed, in some cases removing homes from so-called “V-Zones.”
“Several thousand properties in four New Jersey counties were redesignated in June, so you and your insurer should be familiar with the latest flood zone maps before making any costly decisions,” Shaw adds.
Source: Smart Vent Products, Inc.