Flood Insurance Changes Expect higher premiums, but not as high as they might have been. New fees, too. Expect more private insurance availability. Why and how it's changing.

Everyone Lives In A Flood Zone Just a matter of riskLow Medium High 3 common flood types River Flash Snow and ice

Little Known In Pennsylvania 94% Municipalities designated flood-prone More land affected by development

PA's Major Flood Track Record Insurance Information Institute

PA Ranks 19th Of 50 States For Hurricane Storm Surge Damage Costs PA Ranks 16th For Storm Surge Damage Exposure Insurance Information Institute

Who's Marketed In Flood Plains?

Flood Insurance Handles Risk The answer?NO What does?NFIP, created 1968

Flood Insurance Handles Risk Limits?$250,000 structure $100,000 possessions

Flood Insurance Handles Risk Providers?FEMA administered Private insurers (WYO)

NFIP Historically Self-Sustaining Properties, percentages covered by NFIP policies Insurance Information Institute The problem of recent years? $24B=

Problems Could Get Worse Union of Concerned Scientists USA Increasing sea level risk Amplified storm surge Higher property damage

The Big Global Warming Debate Union of Concerned Scientists USA Real? Hoax? Does it matter?

From , Biggert-Waters

NAR Initially Liked The Act 40,000 estimated lost sales monthly without insurance Insurance accessible to all Phased out subsidies$5B debt pay-back

NAR Criticized Implementation Failed to eliminate subsidies gradually; huge premium increases Disclosed potential rates too late Rate ranges too wideInaccurate quotes Left the bad news to agents to deliver

High Premiums, Lowered Value $500 premium increase = $10,000 property value drop Created pressure for newer law

Result: 2015 Affordability Act Limits premium hikes 18% max Even high end, savings for most Lower closing costs; premium spread out In cost analysis, hikes est. 5%

1st Change: 'Grandfathering' Continues subsidies for older homes Met code when built decades ago Later re-mapped, considered flood risk Their relief restored

2nd Change: Pass-Along Policies Continues subsidies for new buyers Subsidized premiums of home sellers get passed along to property buyers Rates rise annually, not immediately

3rd Change: Fees, Not Hikes Adds new assessments for all policies $25 annually for homes Must be verified primary residences $250 yearly for businesses, vacation homes

4th Change: Deductibles Option $10K deductible allows lower rates Raises minimum deductibles other policies

The Goals All Along Eliminate taxpayer subsidies, debt Keep home sale market productive Make the program pay for itself

The Rise Of New Players 1973 mandated insurance purchase in flood zones Did NOT require government to cover 85 providers under contract $1.3 trillion in coverage Experienced

WYOs Already In The Market Private carriers = Write Your Own(s) Provide excess coverage Specialty coverage too Profitable

Not A Level Playing Field Private carrier expansion supported Carriers' problem: can't compete NFIP subsidies lower premiums

FL, Other States Press The Case FL law encourages WYOs Some policies at NFIP rates 3 types from FloodChoice

Surprise! FEMA Can Be Wrong Appeals possible!Maps are old Data is outdated Successful appeals are reimbursable

Surprise! FEMA Can Be Wrong Advocate's helpRequired by act Answers questions, explain the process Employees in place already:

Best Licensee Flood Zone Advice 'Disclosure of Flood Insurance Requirements, Rates, and Rate Increases'

A Duty To Disclose To Buyers Not required to 'investigate' Required to disclose actual knowledge of flood insurance need Required to disclose knowledge of previous flooding, insurance buy

If Disclosed, Warn About Costs Rates likely to be higher than past Rates might be lower than otherwise because of reforms Goal to reach full market-based premium

If Disclosed, Consider Statement

Be Prepared With Information Supply them, or Show where to get Acknowledgement of receipt!

Identify Insurance Suppliers Who can provide information on coverage and rates? Don't endorse! Don't recommend! Identify more than one!

What To Advise Sellers, If... May qualify for refund on earlier premium They may be unable to collect at closing Advise they consult an attorney