Last Friday the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 was signed into law. The law extends the National Flood Insurance Program (NFIP) for five years and makes reforms to the program.
One of the biggest changes for hurricane-prone areas is the cleverly named “Consumer Option for an Alternative System to Allocate Losses” (yep, that’s “COASTAL”) Act, which directs FEMA to use data from NOAA and other sources to help parse out what portion of insurable damage occurred from the water (which is generally covered by NFIP policies) versus wind (which is not covered by the NFIP, but may be covered by homeowner’s insurance). Calculations will be made for each individual property in question. Should be fascinating to watch this play out.
Other changes include:
- The substantial improvement threshold for Pre-FIRM structures is reduced to 30%
- Changing minimum deductibles for NFIP claims
- Establishing a new Technical Mapping Advisory Council
Whatever you think of the revisions, I think most of us can agree it’s nice to have something in place – those few-month extensions were getting exhausting.