Seven Things to Know About the April 2015 Flood Insurance Changes…with Premium Examples

  1. Flood policies are still assumable/transferable. The only policies that I know of that are not assumable/transferable are serviced by USAA.
  1. Pre-firm rates are still available. The rates are just going away at an average of 15% rate increases annually for primary dwelling policies until they reach the “full risk rate”. The actual rate increase can be anywhere from 5-18% on an individual policy.
  1. Pre-firm Non-primary and non-residential policies will see a 25% rate increase annually until they reach the “full risk rate”.
    • What is the Full Risk Rate? Full Risk Rate is only known by getting an elevation certificate completed and this is strongly recommended on every pre-firm property one is considering to purchase to fully understand their future potential cost for flood insurance.
  1. ALL policies will receive a NEW surcharge. $25 for primary properties and $250 for non-primary, rentals, non-residential properties. A property is considered primary if the owner will live in the property 51% or more over the next 365 days…and FEMA will confirm this
  1. ALL policies will receive a NEW 15% reserve fund fee (NOTE: fee and surcharge are not a part of the rate increase)
  1. Photos are required for all assumed/transferred policies. This is a NEW rule and could cause issues if there is a difference with the current policy and what the photos show. I.E. Lower level is enclosed into a livable space or addition is added that changes the foundation. It is unknown how impactful this new rule will actually be.
  1. There is a NEW $10,000 deductible option. This will save approximately 15% when moving from a $5,000 deductible. Always get lender approval prior to making this move.

To learn more about the April 2015 changes, click here.

Examples of how a policy might be affected…

Pre-Firm Policy Pre April 2015 Post April 2015 Approx. % Change
AE, Primary $1,495 $1,723 15%
AE, Non-Primary $1,900 $2,593 37%
VE, Primary $5,192 $5,982 15%
VE, Non-Primary $6,725 $8,624 28%


Post-Firm Policy Pre April 2015 Post April 2015 Approx. % Change
AE, Primary $448 $513 15%
AE, Non-Primary $472 $764 62%
VE, Primary $2269 $2690


VE, Non-Primary $2269 $2915 28%



  • Every property can be different and these are just examples of how a specific property might be affected.
  • Remember that rate increases for pre-firm policies will go up by an average of 15% annually if a primary property and 25% if non-primary so this is not a 1 time increase.
  • An elevation certificate might help a pre-firm property with their rates but not always.

Property buyers need to understand what it is they are buying and what their true risk could be down the road…

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