Rhode Island NFIP Guide to New FEMA Flood Maps & Insurance Reforms

National Flood Insurance
Program (NFIP): The New FEMA
Guidelines
Michelle F. Burnett, State Floodplain Coordinator
Jess Stimson, State Mapping Coordinator

RHODE ISLAND EMERGENCY MANAGEMENT AGENCY

National Flood Insurance Program
Background
• National Flood Insurance Act of 1968
– Established the NFIP
– Required mapping of flood-prone areas
– Made flood insurance available to all residents
of communities that meet floodplain
management requirements
– Afforded communities ability to obtain certain
types of disaster assistance

Rhode Island NFIP Facts
• All 39 communities and 1 Tribe participate in the National
Flood Insurance Program (NFIP).
• Currently 16,123 policies in Rhode Island
(Data as of Oct. 16, 2013)

– Bristol: 2,141
– Kent : 2,439
– Newport: 3,016
– Providence: 2,668
– Washington: 5,859
• Average RI Premium is $1,343/annually

The NFIP: How It Works


Types of flooding
•
•
•
•

Riverine
Flash
Coastal
Shallow


FLOODPLAIN MAPPING


Why New Maps?
• There is a nationwide project underway to
update the FEMA FIRMs. A combination of new
data and outdated maps has propelled the
project.
• The maps were created by a FEMA
contractor, STARR, through extensive modeling
using new transects, surveys and coastal
analyses.

Projected Effective Dates
•
•
•
•
•

Bristol County: May 16, 2014
Kent County: September 18, 2013
Newport County: September 4, 2013
Providence County: September 18, 2013
Washington County: October 16, 2013

• The preliminary maps will go effective county-wide on
these dates.

• If communities want to remain in good standing with the
NFIP (and they do), each impacted community will
adopt the floodplain ordinance and corresponding
panels.


Definitions
• Base Flood: Flood that has a 1% chance of being
equaled or exceeded in any given year.
• Flood Insurance Rate Map (FIRM): An official map
where FEMA has delineated the special flood hazard
areas.
• Freeboard: An additional level of protection added
above the Base Flood Elevation.
• Special Flood Hazard Area (SFHA): Areas subject to
the Base Flood or greater in any given year. These areas
include Zones A and V.

Definitions
• Pre-FIRM buildings for which construction or
substantial improvements occurred on or before
December 31, 1974, or before the effective date of an
initial FIRM was issued.

• Post-FIRM buildings were built after initial FIRM. They
have reduced risk of flooding and damage if they are
compliant with the state and local floodplain
regulations.
• http://www.fema.gov/cis/RI.html


Definitions of FEMA Flood Zones


Insurance and Mapping Tools
Floodsmart

FEMA Map Service Center


Digital Flood Insurance Rate Maps
(DFIRMs)


ELEVATION CERTIFICATES


Elevation Certificates (ECs)


Elevation Certificates
 The NFIP requires communities to
obtain lowest floor elevation
information for newly constructed and
substantially improved buildings in the
SFHA.
 Required for rating buildings
in A and V zones
 Elevation Certificate certifies building
elevations, but does NOT waive the flood
insurance purchase requirement

The FEMA Elevation Certificate & Guidance
http://www.fema.gov/national-floodinsurance-program-2/elevation-certificate

RI Department of Business Regulation,
Licensed Design Professionals
http://www.bdp.state.ri.us/surveyors/

FLOOD INSURANCE


Flood Insurance Facts
 Standard homeowners insurance doesn't cover
flooding.
 Flood Insurance is required if you live in a Special
Flood Hazard Area (SFHA) or high-risk area AND
have a federally backed mortgage or other
commitment (reverse mortgage, line of credit, etc.)
 A lender can require flood insurance, even if a
structure is NOT in the SFHA.
 Flood insurance can be purchased through a local
insurance agent.

Mandatory Purchase Requirement
 Applies to buying, repairing, constructing
or improving private and publicly owned
buildings
 Secured mortgage loans from lenders
regulated or insured by Federal agencies
 Lender determines if property is
in SFHA
 Lender discretion if building is
not in SFHA

Coverage
 Obtained from local insurance agents

 Agents can sell “direct” policies through
FEMA or Write Your Own (WYO)
companies that work with and agree to
FEMA requirements and rates
 Dwelling, General Property and
Residential Condo Association are
standard flood insurance policy types


How much insurance is available
through the NFIP?
RESIDENTIAL

Building
$250,000

COMMERCIAL

Building

$500,000

Contents
$100,000
Contents

$500,000


Limitations
Insurance coverage limitations:
 In areas below the lowest elevated
floor depending on the flood zone
and date of construction
 In basements regardless of zone or
date of construction


Rating Buildings Pre-FIRM
Rating based on building type and
FIRM zone, not elevation
 Pre-FIRM rates are/were considered
“subsidized”.


Rating Buildings – Post FIRM
Post-FIRM rates are actuarial.
Based on building’s risk of flooding:
 When BFE is available, rating is based
on elevation of lowest floor in
relation to the BFE.


FLOOD INSURANCE REFORM –
BIGGERT WATERS 2012


Changes are Coming to the NFIP
• Congress passed the Flood Insurance Reform Act of 2012
(Biggert-Waters 2012), which will:
– Make the NFIP more financially stable by raising rates on
certain classes of property to reflect true flood risk; and
– Trigger rate changes for certain properties within a revised or
updated map area to accurately reflect the flood risk.
• Intent is to eliminate subsidies for:
– Structures built prior to the first flood insurance map in a
community (pre-FIRM)
– Policies based on the map in effect when structure was built
(grandfathering)
• Artificially low rates and discounts no longer are sustainable.


Current & Upcoming Insurance Rate Changes


Direct Move to Full-Risk Rates
 After the purchase of a property
 Subsidized rates cannot be assigned to the new owner

 After a policy lapse
 When a new policy is issued
 Policies for buildings uninsured as of the date that the
law was passed (July 6, 2012)

 If an offer to mitigate has been refused
 These changes started October 1, 2013


What about when a new flood map is adopted?
• If you live in a community which adopts a new,
updated Flood Insurance Rate Map (FIRM) :
– Charging of insurance premiums based on a prior
FIRM -- grandfathering -- will be phased out.
• The Biggert-Waters Act Section 100207 calls for a phase-out
of grandfathering discounts for properties shown on Flood
Insurance Rate Maps that are updated.
• But the pain is lessened somewhat, because new rates will be
gradually phased in at 20% per year for five years
• Implementation anticipated in 2014.


Who Won’t Be Affected by Subsidy Changes?
Owners of primary residences in SFHAs will be able to
keep their subsidized rates unless or until:
 You sell your property (new rates will be charged to
next owner if they insure);
 You allow your policy to lapse
 You suffer severe, repeated flood losses; or,
 You purchase a new policy (after July 6, 2012).


What Can Be Done to Lower Costs?


Community Rating System (CRS)
A voluntary NFIP program to recognize and
encourage communities to go beyond the
NFIP minimums in their local floodplain
Management activities.
 Communities in full compliance can apply
 CRS uses a class rating system which
entitles residents in SFHAs to premium
reductions


Benefits of CRS
• Reduced flood insurance rates
• More risk awareness &
education
• Improved public safety
– less damage and $ losses
• Better floodplain management
• CRS training and technical assistance

Community Rating System (CRS)
• North Kingstown (Class 9 – 5%)
• Middletown (Class 8 – 10%)
• Narragansett (Class 8 – 10%)
• Bristol (Class 8 – 10%)
• Westerly (Class 8 – 10%)


What You Need to Remember
• Many changes are coming to the Flood Insurance program
• Congress acted to make program stronger financially.

• On many more policies, flood insurance rates will reflect
full risk.
• Insurance rates will rise on some policies; and
• There are specific actions which will trigger rate changes.

• Building or rebuilding higher can lower flood risk and
could save money.
• FEMA can help communities lower flood risk and flood
insurance premiums through:
• Community Rating System program;
• Various mitigation grants; and
• Technical advice on building and rebuilding to mitigate future
flood damage.


Questions?

Contact Information:
Michelle F. Burnett
State Floodplain Coordinator
Michelle.f.burnett.nfg@mail.mil

Jess Stimson
State Mapping Coordinator
Jessica.r.stimson.nfg@mail.mil


Rhode Island NFIP Guide to New FEMA Flood Maps & Insurance Reforms

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