April 1st New Flood Insurance Rates

NFIP has come out with its insurance tables update, it is enough to make your head spin, but here is a quick assessment for policies that renew after April 1st.  NFIP splits the rate analysis with one rate for the first $60,000 of coverage and a second rate for the remainder up to the full $250,000 in coverage (so for the additional $190,000). The rates are based upon each $100 in coverage.

I have not attempted to figure out grandfathering as this will be different for every homeowner. The analysis below is drawn from  one set of tables in the documents linked below.  There are many, many tables, if you have flood insurance, meet with your local agent – in person preferably – to be sure that the appropriate tables are being used.

For Pre-FIRM (Flood Insurance Rate Maps) A zone construction non-grandfathered rates would be:

Primary Residence From Table 2A

First $60k Remainder $190K Total Premium $250K
No Basement  0.89 ($534)  0.81 ($1,539) $2,073
Basement  0.95 ($570)  1.2 ($2,280) $2,850

So, a primary residence, pre-FIRM construction will pay over 1% of the premium face value per year if it has a basement when “full risk” is considered.  “Full risk” does not consider location or depth of water for pre-FIRM properties.

Non-primary residences From Table 2B

First $60k Remainder $190K Total Premium $250K
No Basement  1.3 ($780)  1.2 ($2,280) $3,060
Basement  1.39 ($834)  1.65 ($3,135) $3,969

Conclusions:

A non-primary residence with pre-FIRM construction will pay well over the 1% of premium per year.

Essentially, most of the impacted pre-FIRM properties on Cape Cod (in Dennis 52% of the homes are considered seasonal, and a great number of pre-FIRM homes have basements) will wind up paying above the 1% maximum premium found in the 2014 Homeowners Flood Insurance Affordability Act.

Post-FIRM construction is a bit more challenging. Looking specifically at Post-FIRM A zone homes with the lowest floor at base flood elevation (BFE) the following comes up (BFE 0 means that for a home with no basement, the joists, insulation and any wiring under the first floor is exposed to water, in homes with a basement there is no such damage exposure).

From Table 3A (no differentiation between primary or non-primary residence)

First $60k Remainder $190K Total Premium $250K
No Basement  1.85 ($1,110)  0.16 ($304) $1,414
Basement  0.38 ($228)  0.12 ($228) $456

So, what does this mean? Looking at local examples, a primary residence homeowner with 1” of water at their foundation, which probably will not overflow their basement window into the basement will pay more for flood insurance ($2,850) before all other assessed fees) than a non-primary resident cottage owner will for “post-FIRM” construction with the first floor at base flood elevation ($1,414). The primary residence homeowner would not benefit from looking at the Post-FIRM tables as their lowest floor elevation (the basement) is considered well below base flood elevation and would face exorbitant costs under this scenario.

The links so you can play with this on your own:

Full information https://www.fema.gov/media-library/assets/documents/103209

Rate Tables Section http://www.fema.gov/media-library-data/1424447433649-7085461af53d8c5ffe035686e9dcab25/05_rating_508_apr2015.pdf

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