Exclusively from Foa & Son
One little noticed part of the recent congressional reauthorization of the NFIP was a provision requiring the program to begin to move toward charging actuarially sound rates for insurance on flood exposed properties. Recent losses from Sandy, and Irene last year, only serve to emphasize the need for this change.
People have been relatively free until now to go ahead and build, buy and live in properties in areas exposed to real risks from flood. With all its shortcomings, the NFIP still provided quite inexpensive flood insurance, even on properties that are very exposed to the possibility of flooding, and often on properties that had been repeatedly flooded in the past.
No more. Starting in January and phasing in over five years the rates the NFIP charges for flood insurance will begin to reflect the actual risk of flood in a given location. People will still be free to build and live in flood exposed areas, but if they want flood insurance they’ll have to pay a premium for it that reflects their true level of risk.