An opportunity to purchase lower costing flood insurance to homeowners whose properties were newly mapped into a high-risk area from October 1, 2008, to April 1, 2015, will expire on Friday, April 1, 2016. Act now to ensure that you are covered and dont pay more for flood insurance than you should.
Newly Mapped Procedure - A Cost-Saving Option
On April 1, 2015, FEMA introduced a new lower-cost rating option for properties identified as high risk (zones beginning with the letters A or V, known as a Special Flood Hazard Area, or SFHA) on a new flood map if the property was identified at moderate to low risk (zones beginning with the letters B, C, or X) on a previous flood map. This Newly Mapped procedure allows for a building to be rated using a rate based on the lower-cost Preferred Risk Policy (PRP) if the policy is written and effective within the first 12 months after the new flood map becomes effective. Note that the property must meet the same PRP claims eligibility requirements, and it will have a slightly higher Reserve Fund Assessment and Federal Policy Fee than regular PRPs. After the first year, the rate will begin transitioning to a full-risk rate with annual rate increases of no more than 18 percent. Full-risk rate is defined here as either the standard Zone X rate or a rate using the current effective flood map, whichever is lower. If the property is already covered by the PRP Eligibility Extension (PRP EE), it will renew using the Newly Mapped procedure. Rating details can be found in the NFIP Flood Insurance Manual.
Previously Newly Mapped Properties - Rating Option Closing March 1
While this rating option applies to affected properties from April 1, 2015, onward, FEMA is allowing this rating option to be used for any eligible property newly mapped into a high-risk area from October 1, 2008, to April 1, 2015, that did not get coverage. However, the policy must be effective before April 1, 2016. That means, since there typically is a 30-day mandatory waiting period for flood insurance to become effective, the policy must be purchased by Tuesday, March 1, 2016. Taking advantage of this time period is especially critical for newly mapped pre-FIRM properties as their only option starting April 1 will be to use the current map for rating, meaning premiums could be much higher than with the Newly Mapped procedure.