nc department of revenue 2013 advanced real property seminar
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NC Department of Revenue 2013 Advanced Real Property Seminar Biggert-Waters National Flood Insurance Reform Act of 2012 John Gerber, PE, CFM. Biggert-Waters Flood Insurance Program Reform Act of 2012. Signed into Law July 6, 2012 - PowerPoint PPT PresentationTRANSCRIPT
North Carolina Emergency ManagementFloodplain Management Section
NC Department of Revenue
2013 Advanced Real Property Seminar
Biggert-Waters National Flood Insurance Reform Act of 2012
John Gerber, PE, CFM
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform
Act of 2012 Signed into Law July 6, 2012 Extends financing & authority for the
NFIP through September 30, 2017 Since 2008 Congress passed 18 stop-
gap extensions Sited as BW 12
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform Act of 2012
Pre-FIRM subsidies to be phased out (rates increase 25% per year)
Non-primary residences (living in the home < 80% of the time)~ 305,000 nationally & 4759 NC pre-FIRM subsidized policies will begin phasing into full risk rates. Rates will increase on average over 150 percent
Business properties and Severe Repetitive Losses~ 90,000 nationally and 2143 NC commercial properties and 11,000 nationally & 707 NC SRL properties will begin phasing in to full-risk rates.
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform Act of 2012
Pre-FIRM subsidized rate to full risk rate for :
The sale or purchase of property A lapse in insurance coverage Substantial damage or substantial improvement (30%) Properties uninsured as of BW-12 enactment Refuses mitigation grants
~ 650,000 nationally and 7,728 NC existing pre-FIRM policies will convert to full-risk rates when sold to a new owner
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform Act of 2012
Grandfathering To Be Phased Out:
For any property newly mapped into SFHA or subject to a revised map: any property located in an area that is participating in the national flood insurance program shall have the risk premium rate charged for flood insurance on such property adjusted to accurately reflect the current risk of flood to such property,
Anticipated to take effect 1 October 2014. Rates to increase 20% each year for 5 years until they reach full actuarial rates for the map in effect.
~ 515,000 grandfathered policies, premiums may increase 200%
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform
Act of 2012 Average of 10% increase after Oct. 1,
2013 V Zone – Post-FIRM 11%, Pre-FIRM 17% AE Zone – Post-FIRM 6%, Pre-FIRM 16% Zone A – 8% X Zones – Standard 8%, PRP 1%, ext.
19%
North Carolina Emergency ManagementFloodplain Management Section
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform Act of 2012
DATE BW-12 IMPLEMENTATION STEP
July 6, 2012 BW-12 becomes law; reauthorizes the NFIP for five years and requires FEMA to eliminate most discounts and subsidies
January 1, 2013 Subsidized rates phased out for non-primary residences
October 1, 2013 Subsidized rates anticipated to phase out for business properties, SRL properties, and others. Move to full-risk rates after sale/purchase of property, substantial damage/improvement or policy lapse.
October 1, 2014 FEMA anticipates implementing phase-in of full risk rates for properties affected by map changes (loss of grandfathering)
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform
Act of 2012
Streamlines FMA, RFC and SRL program to allow mitigation of repetitive or severe repetitive loss structures;
Creates a reserve fund
Establishes the TMAC to advise FEMA administrator and SRP
Modifies use of CDBG funds to include flood insurance outreach and community building code administration
North Carolina Emergency ManagementFloodplain Management Section
Biggert-Waters Flood Insurance Program Reform
Act of 2012
Greater civil penalties for lender non-compliance ($350 to $2,000)
Lenders required to escrow and maintain control of claim payments
Study the economic cost of vouchers for low-income
Study of the capacity of the private reinsurance market
North Carolina Emergency ManagementFloodplain Management Section
Insurance discount for Insurance discount for freeboardfreeboard
QUESTIONS??
Coverage: $250K Building/$100K contents
North Carolina Emergency ManagementFloodplain Management Section
October 1, 2013 Rates - provided by Spencer Rogers, NC Sea Grant
Coverage
$100k Building/$40K Contents
$200k Building/$80K Contents
$250k Building/$100K Contents
Premium Increases Due to Reform Act
Zone
AE
VE
PRP
AE
VE
PRP
AE
VE
PRP
Pre-FIRMPremium
$1,410
$2,472
$312
$2,716
$5,663
$390
$3,441
$7,599
$414
1 foot below
$3,796
$4,572
$4,850
$9,080
$5,377
$11,344
2 feet below
STR
$6,192
STR
$12,320
STR
$15,384
3 feet below
STR
$7,380 (199%)
STR
$14,696 (160%)
STR
$18,354 (142%)
At BFE
$1,465
$3,412
$1,643
$6,760
$1,732
$8,434
North Carolina Emergency ManagementFloodplain Management Section
North Carolina Emergency ManagementFloodplain Management Section
North Carolina Emergency ManagementFloodplain Management Section
North Carolina Emergency ManagementFloodplain Management Section
North Carolina Emergency ManagementFloodplain Management Section
Saving Money on Flood Saving Money on Flood InsuranceInsurance
FEMA has programs to help owners reduce their risk and save money on flood insurance
Community-wide discounts through the Community Rating System (CRS)
FEMA grant programs support rebuilding and relocating
Use of higher deductibles to lower premium costs
But the smartest way to save may be to build higher
North Carolina Emergency ManagementFloodplain Management Section
COMMUNITY CRS CLASS
NUMBER OF POLICIES
ANNUAL SAVINGS
Dare County 8 9,989 $659,313Nags Head 6 3,729 $657,921 Ocean Isle 8 2,991 $618,380
Kill Devil Hills 6 4,467 $556,602Carolina Beach 7 3,944 $492,947
Oak Island 8 3,622 $479,593Holden Beach 8 1,965 $429,087Topsail Beach 6 1,124 $353,883
Carteret County
8 4,246 $277,914
Wrightsville 8 2,717 $266,331
Top 10 CRS Community Savings
North Carolina Emergency ManagementFloodplain Management Section
QUESTIONS??