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.”