Flood Insurance Premiums Rising
1. Rates have risen significantly to meet the actual costs
2. Current insurance policy premiums will rise at 20-25% a year until at actuarial cost
3. Contact your insurance agent to look at options
4. Elevation Certificates are now required
5. Making your structure safer will reduce the risk of damage and the cost of insurance
In Vermont, there are around 8,000 structures in the Special Flood Hazard Area. Banks are required to assure that any mortgage or loan to a structure in a mapped hazard area is insured for at least the value of that mortgage, the value of the structure, or amount of insurance available through the NFIP – whichever is less.
Currently in Vermont ~ 2/3s of the structures in the high risk Special Flood Hazard Area do not have flood insurance. Most of these structures were built before the flood hazard maps were available and most have basements. In Vermont around 2/3 of residences have a mortgage.
In 2012 the Biggert-Waters Act requires the National Flood Insurance Program to charge actuarial rates and to pay off accumulated debt. In Vermont an average flood insurance policy in a high risk Special Flood Hazard Area will be around $4,000/year for $170,000 in insured value.
IF you are getting a new policy the structure will be rated at the actuarial rate for the structure. A new policy (or a policy renewed after 10/1/2013) will require an Elevation Certificate to identify how high the flood water (Base Flood Elevation/BFE) will rise relative to the elevation of the lowest floor of the structure. The lowest floor is the basement floor. Bannon Engineering performs elevation surveys and Elevation Certification.
IF you have a current Pre-FIRM Flood Insurance Policy your rates will increase step-wise 20 or 25% each year to the actuarial rates. An additional charge of 5% will be added to establish a reserve fund for the program.