New Law Modifies Flood Insurance For Secondary Homes
RI Flood Insurance
In April 2015, Congress began implementing the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), which repeals some provisions of the Biggert-Waters Flood Insurance Reform Act of 2012, modifies others, and makes additional changes to the National Flood Insurance Program (NFIP).
The new law limits the rate of increase for individual premiums to 18%, while increases for average rate classes are capped at 15%. However, non-primary homes, such as secondary or vacation homes or rental properties, are subject to a 25% annual premium increase. In addition to premium increase, HFIAA requires a $25 surcharge on all policies for primary residences, and a $250 surcharge on all other policies, including non-primary residences.
FEMA defines a non-primary residence as a building that will not be lived in by an insured or an insured’s spouse for more than 50% of the 365 days following the policy effective date.
To determine the correct HFIAA surcharge, insurers must now validate primary residence eligibility. Flood insurance providers sent a letter and Verification of Primary Residence Status form to current policyholders to verify their primary residence.
To make sure you only receive the $25 HFIAA surcharge, policyholders must submit one of the following with the form:
- Drivers license
- Automobile registration
- Proof of insurance for a vehicle
- Voter registration
- Documents showing where children attend school
- Homestead Tax Credit form for primary residence
Because this premium surcharge is mandated by law, if documentation is not provided your renewal premium will automatically reflect the $250 HFIAA surcharge. We strongly encourage you to review your renewal policy to confirm that it is being rated as your primary residence.
If your policy is coming up for renewal and you have not received a letter and form, please contact your OceanPoint agent. If you have any questions, contact our RI Flood Insurance team.