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Will Your Flood Insurance Increase?

Flood insurance is required for any building in a V or A flood zone. The Flood Insurance Reform Act of 2012 made several changes that will negatively impact your insurance rates by removing subsidized rates (pre-FIRM rates). These changes were made to reflect the true flood risk of your home or business, and many insurance discounts will be eliminated.

Rates to increase immediately to full actuarial rate:

New Policy or Purchase:

  • Any new policy or lapsed policy
  • Any policy for a newly purchased property

Property that has been previously flooded or damaged by other means:

  • Repetitive loss property or severe repetitive loss property (4 or more claims payments over $5,000 or 2 claims that exceed the value of the property)
  • Property that has incurred substantial damage (exceeding 50% of its market value) or damage that cumulatively exceeds the fair market value of the property
  • Policy for which the owner has refused a FEMA mitigation offer under the Hazard Mitigation Grant Program

Property that has been improved:

  • Property that has experienced substantial improvement (exceeding 30 percent of the fair market value of the property)

Rates to increase incrementally until full actuarial rates are achieved:

Existing Buildings:

  • Residential homes that are not the primary residence (effective 1-1-2013, rates will increase 25% per year)
  • Primary Single Family homes (effective in 2014, rates will increase 20% per year)
  • Business property (effective 8-1-2013, rates will increase 25% per year)

Revised Flood Map Classification:

  • Premium rate adjustments due to map changes take effect on the effective date of the new map and will be phased in over a five-year period at 20% per year. The Town of Hilton Head Island expects to have revised Flood Maps in 2014 and several properties are expected to receive different classifications.

What can you do to avoid or minimize these rate increases?

  • Raise your residential or commercial building above base flood elevation per your flood zone (V 16-20 or A 14-15)
  • Flood proof your commercial property

For more information please contact Richard Spruce, Floodplain Administratoremail icon at 843-341-4651