BW-12 and HFIAA


FEMA Communicates Flood Risk Information to Policyholders

January 11, 2017

In January 2017, FEMA will begin the next phase of implementation of Section 28, Clear Communication of Risk, of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), which requires the Agency to clearly communicate full flood risk determinations to individual property owners.  To meet this requirement, the NFIP reviewed the flood risk and underwriting information for every flood insurance policy, and is writing to all NFIP policyholders to communicate how their flood risk impacts their premium rate.

Policyholders will begin receiving one of seven letters, depending upon their policy, in 2017.  Policyholders who renewed policies in October 2016 through December 2016 will also receive their first mailing at this time.  The letter will continue to be mailed at each subsequent renewal.  With flood risk information varying from one policy to the next, the letter encourages each policyholder to contact their insurance agent to discuss their policy and options.  It may also be helpful to visit

In addition to Section 28, HFIAA requires gradual insurance rate increases to properties that currently receive artificially low (or subsidized) rates, rather than immediate increases to reflect the property’s full flood risk.  HFIAA requires increases to premiums for most subsidized properties by no less than 5 to 15 percent annually, but no more than 18 percent for an individual policyholder – with limited exceptions –until the premium reaches its full-risk insurance rate.  Approximately 80 percent of NFIP policyholders currently pay full-risk rates and are minimally impacted by these increases.

Information for insurance agents, copies of each category of letter, details about what each letter means, and tips for how individual policyholders can lower their flood risk (and potentially their flood insurance premiums) can be found at


Biggert-Waters 2012 (BW12) and Homeowner Flood Insurance Affordability Act (HFIAA)

NFIP Rate Changes Effective April 1, 2017

March 28, 2017

As announced on September 27, 2016, key changes being made to the National Flood Insurance Program (NFIP) on April 1, 2017, include updated insurance policy premium increases conforming to the premium rate caps established by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) and the Homeowners Flood Insurance Affordability Act of 2014 (HFIAA).

Premiums will increase upon renewal an average of 6.3 percent beginning April 1, 2017. Premiums do not include the HFIAA surcharge or the Federal Policy Fee (FPF), which are not increasing.

It is important to note that nearly 80 percent of NFIP policyholders are full-risk rated and therefore, minimally impacted by these rate increases. If individual policyholders have questions about their premiums, or NFIP coverage, we urge them to reach out to their insurance agent, or visit FEMA’s website, for more information.

More information on NFIP program changes taking effect April 1, 2017 is available here.


NFIP Changes Coming October 1, 2017

March 28, 2017

FEMA, through the NFIP, will announce program changes taking effect on October 1, 2017. These include a reduced Federal Policy Fee (FPF) for tenants with contents-only policies, and revised guidance for refunding the HFIAA surcharge when some policies are canceled.

FEMA always announces program changes and updates six months in advance of these changes taking effect so that Write Your Own (WYO) companies and insurance agents are aware of and can prepare for the changes. All program changes will impact individual policyholders upon renewal of their policies. Changes are announced via WYO Bulletin, available for public review here.


FEMA Issues an Addendum to HFIAA Program Changes: Clear Communication of Risk

Bulletin-16021: Addendum 4 to April 1, 2016, Program Changes – Revised Underwriting Procedures for HFIAA Section 28, Clear Communication of Risk

March 30, 2016

Bulletin W-15046 described the initial implementation of Section 28, Clear Communication of Risk, of the Homeowner Flood Insurance Affordability Act of 2014.  Section 28 requires FEMA to clearly communicate full flood risk determinations to individual property owners regardless of whether their premium rates are full-risk rates.  Ensuring clear and accurate communication of flood risk requires correct underwriting information.  This bulletin describes how FEMA will rate policies using correct information.  The full bulletin includes specific procedures for insurers to follow as part of this effort.

FEMA initially proposed that NFIP insurers report current flood zone and current Flood Insurance Rate Map information, including Base Flood Elevation, if applicable, for all new business policies effective on or after April 1, 2016, and for all renewals effective on or after Oct. 1, 2016.  After further consultation with NFIP insurers, and out of concerns for our customers, FEMA determined that a phased approach would best implement these requirements.

Read the full bulletin here.


NFIP Bulletin Announces Rate Changes

Effective April 1, 2016

FEMA, through the NFIP, provides the opportunity for homeowners, renters, and businesses to purchase flood insurance for financial protection against flooding.  FEMA also works with communities to update and develop flood maps to inform the community of their current flood risk.  These actions allow community members to take important steps to prepare for flooding risk in their area.

FEMA continues to take important steps to implement changes to the NFIP as called upon by the 2012 and 2014 flood insurance reform legislation (Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA)).  In addition to the incremental rate increases required by law to bring rates to full risk, the NFIP is also putting processes in place in order to more clearly communicate flood risk to policyholders.  It is important to note that nearly 80 percent of NFIP policyholders are minimally impacted by either law because they already paid a full-risk rate prior to the passage of Biggert-Waters or HFIAA.  The NFIP is working with Write Your Own (WYO) insurance companies to better inform insurance agents and other stakeholders on the changes that take effect on April 1, 2016, for new business and renewals beginning on and after April 1, 2015.

More Information:

For key changes being made to the program, link to the FEMA published Bulletin w-16022 – October 1, 2016 Program Changes. and visit


Handy Guide to NFIP Changes

Handy Guide to NFIP Changes that Took Effect on April 1, 2016

Making Sense of NFIP Regulatory Changes” A great e-book – a readable and understandable publication.  Link to the guide

For information on relative FEMA Bulletins, link to


On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law. This law repeals and modifies certain provisions of the Biggert-Waters Flood Insurance Reform Act, which was enacted in 2012, and makes additional program changes to other aspects of the program not covered by that Act. Many provisions of the Biggert-Waters Flood Insurance Reform Act remain and are still being implemented. While FEMA actively works to implement the new law, we encourage policyholders to maintain and keep current flood insurance policies. FEMA does NOT recommend cancelling a flood insurance policy. Cancelling flood insurance policies now will leave policyholders unprotected during spring flooding and may cause policyholders to lose important discounts on their rate if they reinstate in the future.

More Information:  To learn more about HFIAA, link to FEMA’s website for direct links to various topics.

2015 Information Includes …

Flood maps change and property owners need to know how a map change may affect their risk and how it affects the requirement to have flood insurance and the policy premium.  This document provides the information necessary to educate a property owner about flood maps, when their flood risk changes, and options to reduce their flood insurance premium.

  • Property owners of buildings newly mapped into a high-risk area were able to ease the transition of the new flood insurance requirement by purchasing a lower-cost policy under the Preferred Risk Policy Eligibility Extension.  But effective April 1, 2015, FEMA has implemented the Newly Mapped Procedure to meet the requirements of the Homeowner Flood Insurance Affordability Act of 2014 and the PRP EE will be transitioning to this new procedure.  This fact sheet is intended to offer insurance agents important information about the Newly Mapped Procedure, how property owners can take advantage of this rating option after a map change, and how policies previously issued under the PRP EE will transition.

  • The National Flood Insurance Program (NFIP) policy now includes a new congressionally mandated annual surcharge required by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA). This fact sheet is intended to educate policyholders on the amount of surcharge that is being applied to their policy and why, how to ensure they are being applied the appropriate surcharge, and who to contact for more information.


NFIP Reform Acts of 2012 & 2014 – Program Changes Effective 4/1/15

Note the upcoming changes effective April 1, 2015 under the NFIP Reform Acts of 2012 and 2014.  These changes will require modification to the NFIP Flood Insurance Manual, Transaction Record Reporting & Processing (TRRP) Plan, and the Edit Specifications document.

Program Changes Effective April 1, 2015:

  • Updated premium rates conforming to HFIAA premium rate caps;
  • Premium increases for non-primary residences and Severe Repetitive Loss properties;
  • New rate tables for Substantially Damaged / Improved structures;
  • Increased Reserve Fund Assessments;
  • New procedures for properties newly mapped into a Special Flood Hazard Area (replacing the Preferred Risk Policy (PRP) Eligibility Extension procedure);
  • New HFIAA-mandated premium surcharge of $25 for policies covering primary residences and $250 for all other policies;
  • Revised deductibles amounts and new $10,000 deductible option for residential properties;
  • New minimum deductibles for PRPs and Mortgage Portfolio Protection Program policies; and
  • Requirement to identify legal address descriptions in the TRRP Plan.

Click here to read more.


How Legislation Changes Effect Flood Insurance –  2014 – HFIAA

2014 – Homeowner Flood Insurance Affordability Act Fact Sheet:  Link to the information released by FEMA, June 11 and March 31, 2014, about the HFIAA. FEMA-HFIAA-Fact_Sheet_06 11 14 and HFIAA Fact Sheet 3-31-14.

2014 – Homeowner Flood Insurance Affordability Act Overview:  Link to the new information released by FEMA April 2, 2014 about the Homeowner Flood Insurance Affordability Act. HFIAA 2014 – Homeowner Flood Insurance Affordability Act Overview

Historic Structures Facts:  bw12 Historic_Structures_Fact_Sheet_2013


Rebuild Stronger – Homeowner Information


Primary or Principal Residence…or both?

FEMA will implement a host of changes to the flood insurance program starting April 1, 2015.  April policy renewals will be going out in February, which means you may start getting calls from policyholders about these changes.  One particular change is the Homeowner Flood Insurance Affordability Act (HFIAA) surcharge.

The surcharge was put into place when Congress rolled back/slowed down the pace for removing subsidized premiums on pre-FIRM policies through HFIAA. Starting April 1, new and renewed policies for single-family primary residences or individual condominium units (or apartments in non-condos used as a primary residence) will include a $25 surcharge. Policies for all other buildings will include a $250 surcharge. This surcharge is independent on what flood zone it is in, so even Preferred Risk Policies will get hit with a $25 or $250 surcharge, depending on the building’s use.

So, what is a primary residence and how will the agent and WYO know what it is, especially since current primary residence questions asked by agents only have been used to distinguish between primary and secondary pre-FIRM residences for rating? And how is that different than a principal residence? Great questions.

Starting with the renewals of all residential policies not yet determined to be primary (e.g., post-FIRM residences and those in B, C, or X zones), the WYO (or insurance agent) will be requesting documentation that the residential property is primary and eligible for the $25 surcharge. FEMA lists six items as acceptable evidence (e.g., driver’s license, auto or voter registration, homestead tax credit). If none of those are available, they will now accept a signed and dated statement that the insured and/or spouse live there for more than 50 percent of the 365 days following the policy effective date (the definition of primary). An example letter and verification form that WYOs will use can be found in Appendix C of the April 2015 WYO Bulletin (issued October 2014). Note that if the agent/WYO don’t receive a response within 30 days of sending out the letter, it will be renewed with a $250 surcharge.

Before proceeding to the principal residence discussion, here is where a negative impact may occur with this surcharge. Take a PRP policyholder who understood they were at risk, though not in a high-risk area, and got a PRP for their vacation home (or rental) near the lake/coast/river. For $200,000/$80,000 in building/contents coverage, they paid $390 last May. Now, at renewal this May, they will pay $630. So, will they now think twice about renewing it since they are not required to carry it? What will this surcharge do to the NFIP’s policy count?

So, how is principal residence different than primary residence? Principal residence definition is used to determine how to pay a flood claim. Principal residence building claims are paid at Replacement Cost, while non-principal residence building claims are paid at Actual Cash Value (ACV), which are paid based on the depreciated value (note that all flood claims on contents are paid ACV). So, here’s the definition: A single-family dwelling in which, at the time of loss, the named insured or the named insured’s spouse has lived for either 80 percent of the 365 days immediately preceding the loss, or 80 percent of the period of ownership, if less than 365 days. So a primary residence (50 percent + occupancy) can still not qualify to be a principal residence (80 percent).



Kentucky Specific BW12 Info


Information for Flood Insurance Agents

Read what FEMA is telling insurance agents, click to see


Announcing Report to Congress: Including Building Codes in the NFIP

December 2013

FEMA Building Science Branch announced the release of a Report to Congress, Including Building Codes in the National Flood Insurance Program.  The Report describes the impact, effectiveness, and feasibility of including widely used and nationally recognized building codes as part of the NFIP floodplain management criteria. FEMA prepared this report and delivered it to Congress on October 21, 2013, in response to Section 100235, Biggert-Waters Flood Insurance Reform Act of 2012 (HR 4348) Report on Inclusion of Building Codes in the NFIP.  The Report can be accessed and downloaded by clicking the following link 2012_i_code_floodprovisions.

Please visit the FEMA Building Science Building Code Resources page for more information on the flood resistant provisions of the building codes, and visit the Building Science Branch homepage for additional multi-hazard mitigation information and resources.