Effective May 1, 2014, all buyers of older properties (“pre-FIRM”) will see a premium rate reduction under the Homeowner Flood Insurance Affordability Act of 2014. Instead of jumping to “full cost” for flood insurance, buyers will assume the seller’s Oct-2013 rate for a pre-FIRM property.
The National Association of REALTORS (NAR) prevailed upon FEMA to implement this provision seven months early. FEMA also extended the rate relief so all pre-FIRM properties (including second homes and businesses) will begin paying Oct-2013 rates when they purchase or renew their flood insurance after May 1, including:
ALL buyers of a pre-FIRM property, not just those whose seller has an existing policy;
ALL recent owners who apply for a new flood insurance policy on a pre-FIRM property;
ALL recent owners who reinstate an old pre-FIRM policy that previously lapsed for any reason;
ALL recent owners who renew a policy on a pre-FIRM property bought or newly insured after the 2012 Biggert-Waters law.
While expediting the rate relief, FEMA must still issue refunds to all those who paid more than their Oct-2013 rate.
NAR will continue working with FEMA and Congress to quickly issue these refunds to anyone overcharged for flood insurance under Biggert-Waters.
For more information on the new Flood Insurance rates and how your clients may be affected, visit NAR’s webpage.