What are the Recent Changes to the NFIP?
Here is what property and casualty insurance carriers need to know about the upcoming changes to the NFIP that will be effective January 1, 2019:
- Insurance premiums for Preferred Risk Policies (PRPs) will increase by 8 percent.
- Any property that is newly mapped into the Special Flood Hazard Area (SFHA) will be initially charged PRP premiums in the first effective year following the map change. Premiums will increase annually by using a multiplier that will vary from year to year according to the map change. Note that this multiplier will be added to the base premium before taking into account the increased cost of compliance (ICC) premium.
- When taking into account the increases to the multiplier, the premiums for policies of newly mapped properties will increase by 15 percent.
What is Staying the Same?
While several changes will take effect on January 1, 2019, it’s also import to mention what won’t be changing for NFIP policies issued on or after April 1, 2018:
- Factors impacting deductibles
- Federal policy fee
- Reserve fund assessment
- HFIAA surcharge
- Probation surcharge
Extreme weather in 2017 resulted in severe inland flooding and billions of dollars in insurance claims. Instead of noting if a property is located in or out of a flood zone during the underwriting process, it would benefit insurance carriers to take into account flood risk levels. As inspection technology continues to advance, insurance carriers will be able to more accurately determine the flood risk that a property poses.
In-person property inspections will continue to play a crucial role in helping insurance carriers identify flood risk. Our team at Insurance Risk Services partners with property and casualty insurance carriers to complete the most accurate property inspections in the industry. Our experienced combined with the use of the latest inspection technology allows us to provide you with underwriting support that you can count on to make informed decisions.
Contact us to learn more about how we use inspection technology to accurately identify areas of vulnerability so that you can best determine which risks are worth taking.