Hundreds of Nevada residents are going to see premium increases in the coming years due to changes in the National Flood Insurance Program. Back in July 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012. That Act calls on the Federal Emergency Management Agency (FEMA) and other agencies to make a number of changes to the way the National Flood Insurance Program (NFIP) is run. Some of these changes have already taken place and others will be implemented in the coming months.
In response to homeowners who were hit by premiums that soared thousands of dollars overnight, President Barack Obama signed a rate relief bill, but policyholders are still facing large, repeated rate hikes over the coming years, but the rate relief bill still allows for price hikes of up to 18 percent annually for primary homeowners. Business and second homes can see a rate hike of 25 percent per year.
In Nevada, approximately 1,300 flood insurance policies will see increases. Of that, more than 900 are homeowners who will see their premiums rise by up to 18 percent each year. And nearly 400 businesses and second homeowners will see the 25 percent increase yearly.
The effects of the rate increases won't be entirely clear until FEMA adopts regulations to implement the changes. Meanwhile, the association of Nevada Independent Insurance Agents plans to launch a series of classes to help educate its members.
Currently, the National Flood Insurance program is $24 billion in debt due to all the years the federal government subsidized flood insurance on homes and businesses built prior to flood zones being created.