Option to increased Flood Rates.

 The Flood Insurance Agency’s (TFIA) Private Market Flood™ announces option to purchase two-year or three-year prepaid policies to lock in current premiums and avoid annual rate increases.

Over 528,000 properties have dropped their flood insurance coverage since the Biggert-Waters Flood Insurance Reform Act of 2012 was passed. FEMA’s total policy count has decreased from 5,620,017 policies to just 5,091,608 as of November 2015. That is an average of 500 properties giving up their flood insurance protection every day.

On April 1, 2016 many of the remaining policies will see 25% premium increases, with every policy experiencing some rate increase. Insurance companies will begin mailing renewal bills reflecting these higher costs next week.

TFIA’s Private Market Flood program’s answer to ever-increasing annual flood insurance premiums is an option to pay $1 and two years premium, up front, for a two-year policy term, guaranteeing no increase for the second year of the policy. There is also an option to pay $2 and pre-pay three years premium to lock in the rate for three years. Beginning next week, the prepaid option will be presented to both new and existing customers.

Evan Hecht, CEO of TFIA, said: “Consumers should be proactive, far in advance of an expiring flood insurance policy, when seeking alternatives to rising FEMA flood insurance premiums. If a lender uses mortgage escrow funds to pay a renewal premium, including those premiums increased substantially, any time before the existing NFIP policy expires, policyholders are unable to cancel the renewal policy and replace it with a private policy. This is the case even if the renewal policy does not become effective for another two months. Insurance companies mail the renewal bills to the lender 60 days prior to expiration. Once paid, the insured is held hostage by FEMA and cannot take advantage of lower premiums in the private market. Homeowners looking to switch to the lower cost Private Market Flood insurance need to act early and demand their lender not pay their current FEMA flood insurance renewal premium notice. Once a lender pays the renewal premium, it is too late.”

What is FIGA?

March 26, 2013

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The Florida Insurance Guaranty Association (FIGA) is a non-profit organization created to help protect policyholders in the event their insurance company becomes insolvent and is liquidated.

Property and casualty insurance companies are required to join the insurance guarantee associations in the states in which they are licensed to do business; Tower Hill Insurance is a member of FIGA.

It is especially important to do your research before you purchase an insurance policy to be certain that the company you are considering is financially strong and stable. If an insurance carrier is ordered into liquidation, the company no longer has any financial obligation to its customers. FIGA then steps in to assist the failed insurer’s customers by settling both new and outstanding claims; $300,000 is the standard claims limit for FIGA.

If your home’s value exceeds the maximum $300,000 amount that FIGA is obligated to pay for a claim, then you are responsible for the remaining cost to rebuild or repair your home. Depending on the amount your home or property is insured for, the gap between FIGA’s limit and the amount of coverage included in the policy originally purchased could be significant.

Because FIGA is a non-profit organization, it is primarily funded by assessing fees to the insurance industry. FIGA bases these assessments on a percentage of insurance premiums that each company receives from its customers.

Typically, Tower Hill is assessed a fee by FIGA, which we pay directly to them in advance of collecting monies from our customers. Then we recoup these funds — that we have already paid to FIGA — by collecting a percentage from each policyholder. On the declarations page at the front of your policy documents, this percentage fee is noted as a recoupment.

In December 2012, Florida property and casualty companies were assessed nine-tenths of one percent (0.9%) of the premiums collected from customers during calendar year 2011. Accordingly, a FIGA Recoupment Fee 2012 will be included on new and renewal Tower Hill policies that are effective March 15, 2013, or later. The fee varies slightly by insurance company and policy type.

To learn more about the Florida Insurance Guaranty Association and how this non-profit works to protect our state’s insurance customers, please visit the FIGA website.

 

Shared From Tower Hill Insurance  www.thig.com

 

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