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Wednesday, October 22, 2014

To: All Members of the Topsail Island Association of Realtors

RE: Proposed changes to the Flood Insurance Program from NFIP



FEMA released a memo dated October 1, 2014, outlining the changes to be implemented in April 2015. Attached is the summary portion of the memo for your review. It has been condensed into the synopsis included on page two for your convenience. Please convey to any and all that may inquire. The synopsis is not meant to be exhaustive of all changes to the program.

As we all know, the National Flood Insurance Program has been changing dramatically for the past two years. The latest rounds of changes outlined below are the direct result of the changes required by the HFIAA (Homeowner’s Flood Insurance Affordability Act) signed into law in 2014.

The Act limits all premium increases for NFIP policies to 15% on an individual basis and no more than 18% for any particular class of risk. There are a couple of exceptions; improperly rated risks, all Pre‐FIRM risks except primary residences and Severe Repetitive Loss (SRL) properties regardless of residency status.

Also, HFIAA mandates a new policy fee of $25.00 for all primary residences as well as a $250.00 fee for all other flood policies issued. These new fees are not included in the premium increase calculations or limitations.

Additionally, HFIAA increases the Reserve Fund Assessment from the current 5% to 15% over time. This increase is part of and limited by the maximum increases allowed under the act. As such, it will have to be implemented in stages over the next few years.

Please remember, the percentage increases under the total increase column reflect the average total increase for the class. Individual policies may not go up that much due to the difference in higher premiums versus the increase attributable to the new HFIAA fee as a calculated percentage of total monies due at renewal. In other words, the higher the starting premium, the lower the percentage effect on the total increase as a result of adding the fee.


Summary of the flood premium increases and total increases in flood insurance renewal bills for the coming year to be implemented in April 2015:

Pre-FIRM properties (AE & VE Zones)

Premium Increase

Total Increase

Primary residences (not SRL)






Non‐primary premium for 2014 $1,000 increasing to $1240 then add the HFIAA fee $1,590


Post FIRM Properties AE & A numbered zones



AE flood zones premium for 2014 $600 increasing to $654 then adding the HFIAA Fee
$679 Primary                                                  $904 Non Pri


VE & V numbered zones



VE flood zones premium for 2014 $5,000 increasing to $5,450 then adding HFIAA fee
$5,475 Primary                                                                       $5,700 non Pri


X Zones



Standard policies



Preferred Risk Policies (PRP)



Additionally, the Federal Policy Fee is increasing on all policies except (PRP and RCBAP) to $45

As with anything involving the Federal Government, these numbers are subject to change. I will strive to bring you updates as they do.

Scott Wheeler, SFI Group, Inc.