North Carolina Emergency Management Floodplain Management Section NC Department of Revenue 2013 Advanced Real Property Seminar Biggert-Waters National Flood Insurance Reform Act of 2012 John Gerber, PE, CFM

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012  Signed into Law July 6, 2012  Extends financing & authority for the NFIP through September 30, 2017  Since 2008 Congress passed 18 stop-gap extensions  Sited as BW 12

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012 Pre-FIRM subsidies to be phased out (rates increase 25% per year)  Non-primary residences (living in the home < 80% of the time) ~ 305,000 nationally & 4759 NC pre-FIRM subsidized policies will begin phasing into full risk rates. Rates will increase on average over 150 percent  Business properties and Severe Repetitive Losses ~ 90,000 nationally and 2143 NC commercial properties and 11,000 nationally & 707 NC SRL properties will begin phasing in to full-risk rates.

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012 Pre-FIRM subsidized rate to full risk rate for :  The sale or purchase of property  A lapse in insurance coverage  Substantial damage or substantial improvement (30%)  Properties uninsured as of BW-12 enactment  Refuses mitigation grants ~ 650,000 nationally and 7,728 NC existing pre-FIRM policies will convert to full-risk rates when sold to a new owner

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012 Grandfathering To Be Phased Out:  For any property newly mapped into SFHA or subject to a revised map: any property located in an area that is participating in the national flood insurance program shall have the risk premium rate charged for flood insurance on such property adjusted to accurately reflect the current risk of flood to such property,  Anticipated to take effect 1 October Rates to increase 20% each year for 5 years until they reach full actuarial rates for the map in effect. ~ 515,000 grandfathered policies, premiums may increase 200%

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012  Average of 10% increase after Oct. 1, 2013  V Zone – Post-FIRM 11%, Pre-FIRM 17%  AE Zone – Post-FIRM 6%, Pre-FIRM 16%  Zone A – 8%  X Zones – Standard 8%, PRP 1%, ext. 19%

North Carolina Emergency Management Floodplain Management Section

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012 DATE BW-12 IMPLEMENTATION STEP July 6, 2012BW-12 becomes law; reauthorizes the NFIP for five years and requires FEMA to eliminate most discounts and subsidies January 1, 2013Subsidized rates phased out for non-primary residences October 1, 2013Subsidized rates anticipated to phase out for business properties, SRL properties, and others. Move to full-risk rates after sale/purchase of property, substantial damage/improvement or policy lapse. October 1, 2014FEMA anticipates implementing phase-in of full risk rates for properties affected by map changes (loss of grandfathering)

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012  Streamlines FMA, RFC and SRL program to allow mitigation of repetitive or severe repetitive loss structures;  Creates a reserve fund  Establishes the TMAC to advise FEMA administrator and SRP  Modifies use of CDBG funds to include flood insurance outreach and community building code administration

North Carolina Emergency Management Floodplain Management Section Biggert-Waters Flood Insurance Program Reform Act of 2012  Greater civil penalties for lender non-compliance ($350 to $2,000)  Lenders required to escrow and maintain control of claim payments  Study the economic cost of vouchers for low-income  Study of the capacity of the private reinsurance market

North Carolina Emergency Management Floodplain Management Section Insurance discount for freeboard QUESTIONS?? Coverage: $250K Building/$100K contents

North Carolina Emergency Management Floodplain Management Section October 1, 2013 Rates - provided by Spencer Rogers, NC Sea Grant Coverage $100k Building/ $40K Contents $200k Building/ $80K Contents $250k Building/ $100K Contents Premium Increases Due to Reform Act Zone AE VE PRP AE VE PRP AE VE PRP Pre-FIRM Premium $1,410 $2,472 $312 $2,716 $5,663 $390 $3,441 $7,599 $414 1 foot below $3,796 $4,572 $4,850 $9,080 $5,377 $11,344 2 feet below STR $6,192 STR $12,320 STR $15,384 3 feet below STR $7,380 (199%) STR $14,696 (160%) STR $18,354 (142%) At BFE $1,465 $3,412 $1,643 $6,760 $1,732 $8,434

North Carolina Emergency Management Floodplain Management Section

North Carolina Emergency Management Floodplain Management Section

North Carolina Emergency Management Floodplain Management Section

North Carolina Emergency Management Floodplain Management Section

North Carolina Emergency Management Floodplain Management Section Saving Money on Flood Insurance FEMA has programs to help owners reduce their risk and save money on flood insurance  Community-wide discounts through the Community Rating System (CRS)  FEMA grant programs support rebuilding and relocating  Use of higher deductibles to lower premium costs But the smartest way to save may be to build higher

North Carolina Emergency Management Floodplain Management Section COMMUNITYCRS CLASS NUMBER OF POLICIES ANNUAL SAVINGS Dare County89,989 $659,313 Nags Head63,729 $657,921 Ocean Isle82,991 $618,380 Kill Devil Hills64,467 $556,602 Carolina Beach73,944 $492,947 Oak Island83,622 $479,593 Holden Beach81,965 $429,087 Topsail Beach61,124 $353,883 Carteret County84,246 $277,914 Wrightsville82,717 $266,331 Top 10 CRS Community Savings

North Carolina Emergency Management Floodplain Management Section QUESTIONS??