National Flood Insurance Program (NFIP) Overview A Local Government How to Guide

Transcription

1 National Flood Insurance Program (NFIP) Overview A Local Government How to Guide William R. Whitson, IMCA-CM Managing Director Local Government Visions, LLC wwwhitson@aol.com Danny Hinson, CFM, FPEM Florida CRS Initiative Danny.hinson@em.myflorida.com

2 The Bad News Congress has acted!- Biggert-Waters 2012 & Home Owners Flood Insurance Affordability Act of 2014 (HFIAA). NEW RATES to start April 1, 2015 The Good News Per FEMA the Community Rating System (CRS) can help local officials secure discounts that will assist your local businesses and homeowners absorb some of the new cost increases!

3 FLC Leadership Actions on NFIP Legislation FLC Formed partnership with Florida Dept. of Emergency Management (DEM) & CRS Initiative in January 2015 Six Summits around the State February Summit #7 in Tampa May 8, 2015 Organizing Comments on proposed changes to EO #11988

4 A Brief History KEY POINTS NFIP.. Was created in 1968/69. It was a solution to address the aftermath of Camille and now most recently (Katrina & Super Storm Sandy). Historically the program has provided a kind of subsidy for development in coastal areas with ever increasing risks! Biggert-Waters legislative changes was spurred by loss to the fund (est. $24B in 2012), major policy concerns & sustainability concerns. New Requirements of Biggert-Waters are being implemented gradually that will impact your community rate increases/new more technically accurate mapping updates. HFIAA slows increases; but, does not avoid them altogether! FEMA has determined that the only way to avoid some increases for business and residents in Florida (especially in coastal areas) is for local governments to actively participate in CRS!

5 NFIP at 10,000 Feet As of October 2013 there were 5.5 Million residential and commercial policies in force. With over 1.28 Trillion in in coverage and 3.8 Billion in annual premiums. Of those Florida was nearly 2 Million policies alone! Over 21,600 communities in 50 States and 6 US territories participate in the NFIP. To qualify for the NFIP, a community adopts and enforces a floodplain management ordinance to regulate development in flood hazard areas. The CRS Program is a Step Above the NFIP. The MAIN GOAL of NFIP is to speed recovery and help flood victim's get back on their feet. From 1978 to 2013 over 2 Million losses were paid totaling $50 Billion.

6 What is Happening to the NFIP Market Place Today? Flood Insurance Rates beginning on April 1, 2015 will be revised for new and existing policies. Changes mandated by Biggert-Waters and HFIAA will be implemented. Increases in rates will be for funding a Reserve Fund Assessment, an annual federal surcharge fee on all new and renewed policies, general rate increases and an additional deductible option. Generically HFIAA limits individual increases to 18% of premium. Limits increases for average rate classes to 15% Allows for a new $10,000 deductible option (building & contents) for single family dwellings. Choosing the max deductible will result in a 40% discount from the base premium. Grandfathering remains a potential cost saving option for policy holders when new maps show their buildings in a higher risk area See Fact Sheet at floodsmart.gov/floodsmart/pdfs/grandfathering+fact+sheet+for+agents-2010.pdf. NOTE: SEE ALSO FEMA FACT SHEET FOR SUMMARY OF LEGISLATIVE IMPACTS

7 A Local Example of the Impacts Ken s Small s CM s Sarasota Herald- Tribune January 21, 2015 Summary of a Flood Zone Map Change meeting with 150 locals & City of Sarasota officials Yet it's important for property owners and real estate professionals to understand the flood maps because of the costs and regulations involved. Real estate agents Jim and Margie Kraft have sold four properties in an upscale neighborhood off Stickney Point Road near Siesta Key. One of the buyers called recently, concerned that the flood map revision could affect the community. So the Kraft s came to the forum to learn more. They left believing their clients will not be affected by the map changes, but that the overall real estate market will be. It could prevent some people from buying, said Margie Kraft. I think it definitely will affect the market. Potential buyers such as Wilson may avoid areas where flood insurance is too costly. The coverage is mandatory for properties in high-risk zones that have a mortgage from a federally regulated or insured lender. Wilson was relieved to find out about the flood zone change and the steep cost of insurance before closing on the warehouse property. He may look elsewhere for an investment. It's going to affect sellers and buyers, Wilson said. It affects the value of the property. NOTE: Full article available in FLC Website.

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10 Looking Ahead NFIP (and any future form) will be risk based and seek to balance risks rather than provide undue federal subsidies. NFIP Rate Increases of 15-20% or more cover reserve funds/surcharges/increased risk in each policy. New flood mapping and associated changes will be a primary driver of the system. Mapping updates (required by law) are evaluated on a 5 year cycle. A second system driver is Mitigation or in other words best management practices (BMP s) that can help lower or eliminate hazards, and exposure to undue risk! CRS is primarily based on Mitigation and BMP s.

11 Introduction to CRS Basics CRS works on a point system is a class 10 and provides 0% discount on NFIP rates in your community is a class 9 and provides a 5% discount. Points are gained by conducting various activities that contribute to flood mitigation. There are four (4) credit activity categories to earn CRS points: 1) Public Information Activities = 300 Series 2) Mapping & Regulations = 400 Series 3) Flood Damage Reduction Activities = 500 Series 4) Warning & Response = 600 Series

12 Introduction to CRS Basics Continued What is your community s class rating? Go to Look for the Icon or file of type application/pdf Community Rating System (CRS) Communities and their Classes - May 2014

13 How Can My Community Benefit From CRS and Lower Potential Barriers to Development? Recommendation's for success evaluate your current CRS class standing/understand what make s it tick? IT IS A SYSTEM! Focus on Mitigation efforts Ask what are we doing that may not be documented already and getting CRS credits? NOTE: You may be able to Piggyback Items from Counties and get credits if properly documented. Ask the Florida CRS Team. DEM has now hired Danny Hinson, Florida CRS Coordinator he is here to help us gain knowledge of CRS. He can provide helpful tips on maintaining or increasing your CRS rating! NEW DEM WEB Site:

14 COMMUNITY RATING SYSTEM Danny Hinson, CFM, FPEM Florida CRS Initiative THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

15 CRS OBSERVATIONS AND CHALLENGES What is the Community Rating System (CRS) National Flood Insurance Program (NFIP) CRS is a Voluntary part of the NFIP Provides reduced flood insurance premiums where there is better floodplain management! THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

16 CRS OBSERVATIONS AND CHALLENGES CRS Participants / Benefits Florida: $190 million / annual savings Only 45% FL communities participating! Nationally: $360 million / annual savings Only 6% participating! THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

17 CRS GOALS Review CRS Goals Reduce and avoid flood damage to insurable property Strengthen and support the insurance aspects of the NFIP Foster comprehensive floodplain management THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

18 THE CRS ACTIVITIES THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

19 FLORIDA CRS INITIATIVE THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

20 CRS INITIATIVE Florida CRS Initiative Assist Community CRS participation Conduct workshop(s) for community staff Seek additional credit points Liaison with FEMA Planning Publicize: Flood Insurance Premium Discount THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT

21 COMMUNITY RATING SYSTEM Danny Hinson, CFM, FPEM State CRS Coordinator THE FLORIDA DIVISION OF EMERGENCY MANAGEMENT