Biggert Waters NFIP Reauthorization Frequently Asked Questions

The following set of question and answers was released this month by FEMA trying to address some of the more frequently asked questions regarding the changes that are occurring as part of the re-authorization of the National Flood Insurance Program. If, after you read these questions and answers, you have any additional questions I strongly encourage you to talk to your insurance agent.

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2 thoughts on “Biggert Waters NFIP Reauthorization Frequently Asked Questions

  1. Annie K Hughes

    This change in the flood policy is beyond belief. WE had to purchase the policy when we bought our house in West Dennis. The policy states is the Mass Fair Plan, which is private insurance companies who have put this together, it is not a public program, even though it makes you think it is. Most insurers refused to write these policies, so you are held captive. The KICKER is that the fine print states ” payout will only be made IF three consecutive houses have the same damage from the same storm. If only two houses have damage, and one does not, and a third one after the non damaged house, no claims will be paid. How fair is the fair plan,,,, it will only take your money, and IF a hurricane Sandy hits your area, i am sure no three houses will have the same damage. We have been paying this for 7 years, and it gets more expensive every year. It started with $215,000 of coverage, it is now $235,000 of coverage,, it NEVER will cover repair or replacement of your house, and your homeowners will not even talk to you because you have FLOOD insurance. If you do not have to buy this,, do not,,, it looks now like the Northeast WILL have to buy it after all the catastrophic storms where it was not needed. If you own your home outright, you do not have to have Flood Insurance. Save the $5000 per year, after 10 years you have saved yourself $50,000. Where is your representative when you need them,, ,Dan Wolf have you weighed in on this one?

  2. Daniel Fortier Post author

    Annie, starting with the last comment first, this is federal legislation not state, so Dan Wolf has no role in it. From what I can ascertain, the Mass FAIR Plan is homeowners insurance not flood insurance. The FAIR plan does cover wind and many other storm related damages, but you need Flood Insurance backed by FEMA (FAIR is a state system) for flood damage FAIR or any other homeowners insurance will not cover flood damage. Yes the insurance is expensive, but the $50,000 one might save over 10 years is not going to meet the repair value of a Hurricane Sandy. Unless someone is independently wealthy, I cannot see a person in a flood prone area not getting flood insurance.

    From an economic standpoint, yes the higher flood insurance rates are going to impact the value of housing resale. But, having the insurance will allow a damaged property to recover far faster than if someone needs to refinance in order to rebuild. People dropping flood insurance due to the cost will have a far more lasting impact economically on the region, and any neighborhood hit with extensive damage, than paying the higher rates.

    When the national FIRM program was reauthorized a decision was made in Congress to try to remove the Federal Government from subsidizing construction in flood zones. That decision has drastic impacts. A large chunk of America is in a flood zone. Just look at the Midwest right now. Push back on these changes have already started to occur in New York and New Jersey. I am sure there will be further push back.

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