FEMA Letters: Flood Risk and Policy Options
If you have a National Flood Insurance Program (NFIP) policy, you may receive a letter from FEMA requesting an Elevation Certificate so that they can determine your true risk rate, which could be higher or lower than what you are currently rated.
If your actuary rate is higher, your rates will increase incrementally until they reach your actuary rate. Without an Elevation Certificate, FEMA will not know when to stop increasing your rate.
Visit the Pinellas County Flood Map Information Service or your City’s website to see if there is an elevation certificate available online. Check with your jurisdiction and insurance company to see if there is already an Elevation Certificate on file for your property.
Many NFIP policies currently provide subsidized premiums, which are much lower than the actuarial premium (the actual expected value of the loss).
As the costs and consequences of flooding have increased, additional legislation has been enacted to strengthen the program.
Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12)
- Calls for raising rates to reflect true flood risk to financially stabilize the Program by eliminating some artificially low rates and discounts.
Homeowner Flood Insurance Affordability Act of 2014 (HFIAA)
- Repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act to prevent steep jumps in premiums.
- Requires gradual rate increases to properties now receiving artificially low (or subsidized) rates instead of immediate increases to full-risk rates.
- Premium increases required for most subsidized properties by no less than 5 to 15 percent annually, but no more than 18% annually for an individual policyholder, until it reaches full-risk rate.
- Premium increases for older business properties with subsidized rates, non-primary residences with subsidized rates, severe repetitive loss properties with subsidized rates, and any buildings that have been substantially damaged or improved will have up to 25 percent annual increases until they reach their full-risk rate.
- Clear Communication of Risk section requires FEMA to clearly communicate full flood risk determinations to individual property owners regardless of whether their premium rates are full-risk rates.
- Ensuring clear and accurate communication of flood risk requires correct underwriting information, so FEMA will be sending letters to NFIP policy owners requesting additional information, including an elevation certificate.
What this means: Most flood insurance rates will now move to
reflect full risk and flood insurance rates will rise on some policies.
Ensure Incremental Rate Increases:
Keep your flood policy in force! If you ever allow your flood insurance policy to lapse for either more than 90 days, or twice for any number of days, you may be required to provide an EC, and you will no longer be eligible for the discounted rate you have been receiving. You will immediately begin paying a rate based on your true flood risk. Currently, a new purchaser is also allowed to assume the prior owner’s flood insurance policy and retain the subsidized rates.
What this means: If you let your flood policy lapse your policy will
go to a full-risk rate.
Flood insurance premiums are based on a number of factors including:
- Type of building
- Number of floors
- Basements or enclosures
- Flood mitigation techniques, such as breakaway walls and flood-vents
- Elevation of the lowest floor of the building
- Flood hazard zone
- Base Flood Elevation
An Elevation Certificate contains the information needed to assist an insurance agent with determining the true flood risk premium for a property. Insurers must correct policies as needed and notify policyholders of changes to their policy rating information. These changes may result in a premium adjustment due at the next renewal.
What this means: If you have a NFIP flood insurance policy, you will receive a letter from FEMA to notify you that a review of your property's flood risk was done, and explain what was found and how the flood risk will impact what you pay for flood insurance.
Because an Elevation Certificate is based on your building’s specific features, it provides information needed to know your property’s true risk of flood damage. Getting an Elevation Certificate will stop your annual increases at your actuary rate.
If your property is in unincorporated Pinellas County, you may find an elevation certificate for your property at: http://pinellascounty.org/flooding/maps.htm or by calling (727) 464-3888. If you live within an incorporated area of the County, please contact your municipality to find out if there is an elevation certificate on file.
What this means: Having an Elevation Certificate (EC) may lead to lower flood insurance costs immediately or in the future.
Pinellas County is Doing Things:
The County participates in the NFIP Community Rating System, which is a voluntary program designed to reward communities with comprehensive floodplain managements programs with flood insurance premium discounts. The CRS discount is the biggest flood insurance discount available. Because the County has a proactive floodplain management program, you may be eligible for up to a 25% discount on your flood insurance premium. Unincorporated Pinellas County residents and businesses are saving over $5 Million each year in flood insurance premiums! Check with your flood insurance agent to make sure your flood insurance policy is rated correctly and you are receiving the correct CRS discount.
One of the Pinellas County Floodplain Management Program initiatives is to provide you with flood map information. Our Flood Map Information Service is available online at http://www.pinellascounty.org/flooding/maps. This service is free and easy to use, simply enter the address for the property of interest to find:
- FEMA Flood Insurance Rate Map (FIRM) information needed to write a flood insurance policy, such as whether the property is in an SFHA and which zone it is in
- Additional FIRM information, such as whether the property is in floodway
- Other flood information, such as whether the property may be affected by storm surge
- Flood depth information, including potential storm surge flood depths
- Information about areas that should be protected because of their natural floodplain functions, including the National Wetland Inventory
- Evacuation zones, routes, and shelters
It should be noted that the Base Flood Elevation (BFE) on the maps is only accurate to plus or minus a half foot. For an accurate BFE, refer to the Flood Profiles or Flood Elevation Tables in the Flood Insurance Study .