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Flood Insurance Changes Include Flood Zone Expansion

Flooding During Hurricane Katrina Brings about Flood Insurance Changes
Hurricane Katrina brought on massive flooding that washed the National Flood Insurance Program into the red.

In response to the devastation wrought by Hurricane Katrina in 2005 and Superstorm Sandy in 2012, The Federal Emergency Management Agency (FEMA) has decided to update its flood hazard maps; some of which which have not been updated in nearly 30 years. The combined costs of these two storms has pushed the National Flood Insurance Program (NFIP) $24 billion in debt.

Biggert-Waters Flood Insurance Reform Act of 2012

Another big change that took place in 2012 was Congress’s passage of the Biggert-Waters Act, which will end both flood insurance subsidies and the grandfathering of older structures. The subsidies to be phased out include those for non-primary residences, severe repetitive loss properties, business properties and properties that have sustained flood-related damages greater than their fair market value. Rates will also go up on properties after a change in ownership, when flood insurance coverage lapses, when revised flood insurance rate maps are issued and if a building sustains substantial improvements or damages. Insurance rates began increasing in 2013 and will continue to do so by 25% each year until they reach full cost. “Grandfathering” allowed policyholders who were in compliance with the flood maps in effect when the structure was built to use the earlier base flood elevation (BFE) in calculation of their flood insurance rates. Many grandfathered properties do not meet current construction and elevation standards and would be subject to higher premiums, as much as $7,000 – $10,000 per foot below flood level.

Implementation Delays Possible

A bill introduced in the US Senate, the Homeowner Flood Insurance Affordability Act, would provide temporary relief to millions of property owners by delaying some of the rate hikes. This new bill would postpone some increases in the rates charged on primary residences for four years. It would also slow increases for properties sold after the start date of the Biggert-Waters Act, July 6, 2012. Business properties, second homes and repeatedly flooded properties would not see a delay in rate increases under this bill.

TrakLogix Provides In-App Flood Zone Certifications

A flood certification is a document that states the flood zone status of real property. TrakLogix uses integrated LendLogix Flood Services to provide flood zone determination reports, certifications, and life-of-loan services to lenders and insurance providers nationwide.  Ordering a flood certification right from TrakLogix is easy, simply check the “Flood Certification” box. If a property is at risk, it doesn’t necessarily preclude a loan, but flood insurance could be required. With rates set to change, knowing the status of a property is of the utmost importance. We offer our customers a choice in levels of service, from simple delivery of flood zone determinations to complete portfolio tracking.

Learn More About Flood Insurance Changes

Use the tools at to learn more about how properties and policies will be affected by the Biggert-Waters Flood Insurance Reform Act of 2012.

Listen to audio of a story on the upcoming flood insurance changes.

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