RICHMOND, Va., Dec. 13, 2013 /PRNewswire/ -- The Biggert-Waters Flood Insurance Reform Act of 2012 made significant changes to the National Flood Insurance Program (NFIP) that begin to take effect this year. This law requires that increased flood insurance premiums be phased in and existing premium subsidies be phased out.
As a result, property owners in "Special Flood Hazard Areas" may see more expensive insurance rates, in some cases significantly more, than what they are currently paying. Increases in premium rates for previously subsidized non-primary residences were implemented this past January. Beginning on October 1, 2014, premium for business properties with subsidized premiums and residences that have had "severe repetitive loss" will increase when a flood insurance policy is renewed.
"Union First Market Bank recognizes the impact the Biggert-Waters Act will have on households and business owners throughout Virginia, and we are committed to helping property owners prepare for this additional financial pressure in any way we can," said G. William Beale, chief executive officer of Union First Market Bank.The new premiums will reflect the true flood risk of homes and businesses. Premiums will have the potential to reduce the risk-rate subsidy previously given by as much as 25 percent per year for the next four years until full-risk rates are reached. Flood insurance premiums are calculated based on Federal Emergency Management Agency (FEMA) maps and the minimum "base flood elevation" for that region. An owner whose home or business is built at or above the base flood elevation, or "BFE," will be at an advantage. Their premiums may still go up but will be lower than those for homes that do not meet the minimum requirements. Property owners in special flood hazard areas will need to know the elevation of their home or business in relation to the BFE. An insurance agent cannot calculate the new premium without an elevation certificate.