Flood Law Changes with the Biggert Waters Act 2012

Beginning July 6, 2012, there have been some significant changes to the National Flood Insurance Program. Many of the changes are effective October 1, 2013 but many are retroactive to July 6, 2012 or January 1, 2013 renewals.

We have always instructed lenders, realtors and clients that if you home was built 12/31/1974 or before, you did not need an elevation certificate. Your home was classified as Pre-FIRM (before the Flood Insurance Rating Maps were made). The properties in this category had their own rating and it did not matter how high the finished floor level was or vents in the bottom floor. None of the flood rules applied. That has all changed with the Biggert Waters 12 or BW12 as it has dubbed.

Any property purchased in flood zones beginning with A or V, between July 6, 2012 to September 30, 2013, will be required to submit an elevation certificate at renewal of their flood policy. The rate will be calculated based on the actual elevation of the home regardless of year built. Property purchased on or after October 1, 2013 in flood zones beginning with A or V, will be required to submit an elevation certificate in order to purchase flood insurance.

Properties purchased prior to July 6, 2012 that are a primary residence (defined as owner resides in the home 80% of the time) will NOT see big increases at this time unless you allow your policy to lapse or the property is sold. Properties that are seasonal, second homes, business properties, investment properties located in flood zones beginning with A or V, could see 25% increases each year until the premium is considered actuarially sound. Elevation certificates voluntarily submitted will only be used if they benefit the client.