By Anessa V. Cohen

There have been some serious changes to the flood-insurance guidelines this year, in particular to the pricing, which in the past was subsidized at least 25% by the federal government. Due to new enactments in Congress, rather than gradual rises in pricing over many years, doing away with the subsidy will lead to rapid increases, causing a big change in flood-insurance rates for 2014.

I have reprinted some of the guidelines that FEMA now has in place:

On July 6, 2012, a law took effect that made significant reforms to the National Flood Insurance Program (NFIP). Among other things, this law requires FEMA to take immediate steps to eliminate a variety of existing flood-insurance subsidies.

Under the new law, flood-insurance premiums on many properties in special flood-hazard areas will increase. The new rates will reflect the full flood risk of an insured building, and some insurance subsidies and discounts will be phased out and eventually eliminated. Rates on almost all buildings that are, or will be, in special flood-hazard areas will be revised over time to reflect full flood risks. Based on various conditions set forth in the law, subsidies and grandfathered rates will be eliminated for most properties in the future.

Subsidies will be phased out for the following types of properties: non-primary residences, severe repetitive loss properties, business properties, and properties that have incurred flood-related damage where claims payments exceed the fair market value of the property.

Policy rates will also increase based on one or all of the following circumstances:

– After a change of ownership;

– After there is a lapse in insurance coverage;

– When a new or revised flood-risk map is issued; or

– If there is substantial damage or improvement to a building.

Starting January 1, 2013, premium rates for subsidized non-primary residences would begin increasing. Rates would increase 25% per year until they reflect the full risk rate. Later in 2013, there would be premium increases for additional categories of subsidized properties. Rates for these additional categories of properties will phase in at a rate of 25% per year until they reflect full risk rates. Additionally, in late 2013, FEMA would begin to apply full risk rates to policies written for newly purchased property.

Beginning in 2014, premium rates for other properties, including non-subsidized properties, will increase as new or revised flood-insurance rate maps become effective and full risk rates are phased in for these properties.

These premium rate increases will include properties in areas that have received new or revised flood-insurance rate maps since July 6, 2012 (the date of enactment of the new law). Additionally, even if you build to minimum standards today, you will be subject to significant rate increases upon remapping if your flood risk changes in the future.

Homes located in a high-risk flood zone (i.e., zones beginning with an “A” or “V”) and built before the first flood-insurance rate map became effective, and that have not been substantially damaged or improved, may currently be receiving subsidized flood-insurance premium rates.

Talk to your insurance agent for help determining your specific situation, or for more information check the FEMA Map Service Center to view a map showing which zones your property may be located in at v

Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker and a licensed N.Y.S. mortgage originator with over 20 years of experience, offering full-service residential, commercial, and management real-estate services (Anessa V Cohen Realty) and mortgaging services (First Meridian Mortgage) in the Five Towns and throughout the tri-state area. She can be reached at 516-569-5007 or via her website, Readers are encouraged to send questions or comments to

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