Effective May 1, 2014, all buyers of older properties (“pre-FIRM”) will see a premium rate reduction under the Homeowner Flood Insurance Affordability Act of 2014.
Instead of jumping to “full cost” for flood insurance, buyers will assume the seller’s Oct-2013 rate for a pre-FIRM property.
NAR prevailed upon FEMA to implement this provision seven months early. FEMA also extended the rate relief so all pre-FIRM properties (including the second homes and businesses) will begin paying Oct-2013 rates when they purchase or renew their flood insurance after May 1, including:
- ALL buyers of a pre-FIRM property, not just those whose seller has an existing policy;
- ALL recent owners who apply for a new flood insurance policy on a pre-FIRM property;
- ALL recent owners who reinstate an old pre-FIRM policy that previously lapsed for any reason;
- ALL recent owners who renew a policy on a pre-FIRM property bought or newly insured after the 2012 Biggert-Waters law.
While expediting the rate relief, FEMA must still issue refunds to all those who paid more than their Oct-2013 rate.
NAR will continue working with FEMA and Congress to quickly issue these refunds to anyone overcharged for flood insurance under Biggert-Waters.
NAR Flood Insurance Resources on the Web: