Why am I getting an increase on my Flood insurance policy?

Why am I getting an increase on my Flood insurance policy?

by Tim D’Angelo

flooded house

The Biggert Waters Flood Insurance Reform Act of 2012 phases out subsidized rates for certain properties, including non primary residences or Rental Dwellings.  These properties will no longer receive reduced premium rates for Louisiana flood insurance and the annual premium rates must be increased by 25% a year until they reflect the full premium rate. 

You may have received a letter “Non Principal/Non-Primary Residence Policyholder notice”

If the property is not your primary residence,  your Flood Insurance renewal premium will increase 25%

If the property is your primary residence,  you need to sign the letter and return to the NFIP upon receipt.

What is the definition of primary residence?

You live at the location for at least 80% of the 365 days following the policy date.

It is important you sign and return the letter from NFIP if the property is your primary residence to avoid a 25% premium increase on your Louisiana Flood Insurance Renewal. 

Other property types that will lose subsidized rates

  • Severe repetitive loss property
  • Property that has incurred flood related damages the exceed the fair market value of the property
  • Any Business Property
  • Any Property that has substantial improvement exceeding 30% of the fair market value
  • Any new policy or lapsed policy or any policy for a newly purchase property
  • Any policy for which the owner has refused a FEMA mitigation offer on a repetitive loss property

What is a Severe Repetitive Loss property?

A property with four or more claims payments of over $5,000 or two claims that exceed the value of the property 

Remember shopping Flood Insurance is not like shopping for Home Insurance.  The rates are set by the government (FEMA).  Your flood declarations page may have an insurance company logo on the declarations page,  but they are receiving commission to service the policy only.  All rating factors the same,  the flood premium should be equal no matter which insurance company you contact for a flood insurance quote proposal.  

If you recently made a flood claim and you didn’t like the service you received during the claims process,  you can move your Flood insurance policy to another servicing company at renewal.

If you would like us to rate a flood insurance quote for you or find you another flood servicing company,  contact us now