Answers about Flood Insurance
I just purchased property and the building is located in a Special Flood Hazard Area (SFHA). Will I be eligible to receive preferred risk pricing on the policy?
In 2010, FEMA announced a revision in its Preferred Risk Policy (PRP) eligibility rules under the NFIP. Going forward, PRP eligibility would depend upon whether or not the property was determined to be in an SFHA due to a flood map revision effective on or after October 1, 2008.
Buildings that were newly mapped into an SFHA due to a map revision on or after October 1, 2008, and before January 1, 2011, are eligible for a PRP for two policy years, between January 1, 2011, and December 31, 2012. Buildings that will be mapped from a non-SFHA to a SFHA due to a map revision on or after January 1, 2011, will be eligible for a PRP for two policy years following the effective date of the map revision.
Buildings meeting the above requirements still must meet the PRP loss history requirements. If there are two claims or disaster relief payments for flood of $1,000 or more, or three losses of any amount, the structure is ineligible for the PRP.
At the end of the extended eligibility period, policies on these buildings must be written as standard-rated policies.
The PRP two-year eligibility extension is distinct from existing grandfathering rules, does not apply to properties that were already located in an SFHA prior to the map changes initiated on or after October 1, 2008, or to Residential Condominium Building Association Policies issued to residential condominium associations.