Intergovernmental Affairs Advisory
National Flood Insurance Program Bulletin Rate Changes Effective April 1, 2017
March 28, 2017
As previously announced on Sept. 27, 2016, key changes being made to the National Flood Insurance Program on April 1, 2017 include updated insurance policy premium increases conforming to the premium rate caps established by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), per BW-12 Section 100205 and HFIAA Section 5 respectively.
In accordance with statutory requirements, premiums will increase from an average of 6.3 percent beginning April 1, 2017. Premiums do not include the HFIAA surcharge or the Federal Policy Fee, which are not increasing. When the HFIAA surcharge and FPF are included, the total amount billed to the policyholder will show a lesser average increase of 5.4 percent.
It is important to note that nearly 80 percent of NFIP policyholders are full-risk rated, and therefore minimally impacted by these rate increases.
For policies issued on or after April 1, 2017, there will be no changes to:
- Deductible Factors
- Federal Policy Fee
- Reserve Fund Assessment
- HFIAA Surcharge
- Probation Surcharge
- Increased Cost of Compliance Premiums
- Tentative and Provisional Rates
- Group Flood Insurance Policies
- Mortgage Portfolio Protection Program
This week, FEMA will also announce program changes that will take effect on Oct. 1, 2017 and impact individual policyholders as their policies renew. These include:
- Pro-rated refunds of the HFIAA surcharge for some policies – Policyholders who cancel their NFIP policy on or after Oct. 1, 2017 will receive a pro-rated refund of the HFIAA surcharge. Previously, premium refunds for some cancellations did not include a refund on the HFIAA surcharge ($25 per policy for primary residences, and $250 per policy for non-primary residences or property).
- Reduction of the Federal Policy Fee for renters – The Federal Policy Fee for contents-only policies for tenants will be reduced from $50 to $25.
FEMA always announces program changes and updates six months in advance of these changes taking effect so that Write Your Own companies and insurance agents are aware of and can prepare for the changes. Changes are announced via WYO Bulletin, available for public review by April 1, 2017 at: http://nfipiservice.com/Bulletin_2017.html.
We continue to take important steps to comply with the BW-12 and HFIAA flood insurance reform legislation.
FEMA's primary focus remains improving NFIP delivery and the customer experience, and as such we will continue to enhance support for customers. The NFIP provides the best opportunity for homeowners, renters and businesses to protect themselves financially against flooding.
If individual policyholders have questions about their premiums, or NFIP coverage, we urge them to reach out to their insurance agent, or visit FEMA's website for more information.
If you have any questions, please contact FEMA’s Intergovernmental Affairs Division at (202) 646-3444 or at FEMA-IGA@fema.dhs.gov.