WELCOME

HOW DO YOU “RATE”

RATING THE NFIP POLICYCHARLES (CHARLIE) JACKSON, CFM

RATING/UNDERWRITING Understanding Rating and Underwriting the NFIP Policy

(Using the latest Flood Insurance Manual)

How Floodplain Management and Mapping Determines the Flood Insurance Rate

Who rates the premium ?The Write Your Own (WYO) Insurance CarrierThe Insurance Agent The Insurance Agency (Assigned Agency Associate/Office Manager/Agent)

Not the NFIP Insurance Specialist !!!“It’s a liability issue”

How is the policy rated?

•Electronically (plug in the Floodplain facts)

•Manually (“RATE” section of Flood Insurance Manual)

3 NFIP Policies The Dwelling Form

The General Property Form

The Residential Condominium Building Association Policy (RCBAP)

Know Your A, B, C and D’s Property Coverages

Coverage

◦ A Building Property (Structure)◦ B Personal Property (Contents)◦ C Other Coverages (Debris Removal, Loss Avoidance)◦ D Increased Cost of Compliance (ICC)

Rating Information Needed

1. Pre or Post FIRM2. Zone3. Occupancy (1 to 4 Family)4. Building Type5. Basement6. Elevation Difference

In the “ZONE” V No BFE, Mandatory

VE BFE, Mandatory

A No BFE, Mandatory

AE BFE, Mandatory

AH Ponding, BFE, Mandatory

AO Sheet flow, No BFE, Mandatory

AR BFE in process, Mandatory

AR/AE…Dual… Mandatory

X (B,C) No BFE, Not Mandatory

D Unstudied, Not Mandatory

Where is my BFE?

A Floor you walk on

--X-- No Compliance Rules

V Lowest member

FREEBOARD

OCCUPANCYSingle Family2-4 FamilyOther ResidentialNon-Residential BusinessOther Non-Residential

Building Type1 Floor

2 Foors

3+ Floors

Split Level

Mobile Home on Foundation

Basement or Enclosure? (None, Finished, Unfinished)

Breaking Down the PolicyPersonal Information

Rating Data

Premium Calculation

Personal Information

Rating Data

Premium + Fees

COMMUNITY: Zone, Mapping, GF’d, Compliance,...BUILDING: Type, Basement, Primary, SRL,… CONTENTS: Below/Above ground level?...Construction: Date, Mfg’d Home, SI,… Elevation: Post/Pre FIRM, Zone, EC, Bldg. Diagram,

BFE, LAG,…

Calculation Scenario$100,000 Structure / $25,000 Contents

Post FIRM AESingle Family Primary1 FloorNo BasementElevation +2.5’CRS “Class 8”

Community Rating System (CRS)

Residential

Other/Business

Premium Calculation $100,000 Structure / $25,000 Contents

EMERGENCY PROGRAM

BUILDING COVERAGE

REGULAR PROGRAM

Basic Insurance Limits Additional Insurance Limits

Total Insurance Limits

Single-Family Dwelling $ 35,000 $ 60,000 $190,000 $250,000

2–4 Family Dwelling $ 35,000 $ 60,000 $190,000 $250,000

Other Residential $100,000 $175,000 $325,000 $500,000

Non-Residential $100,000 $175,000 $325,000 $500,000

CONTENTS COVERAGE

Residential $ 10,000 $ 25,000 $ 75,000 $100,000

Non-Residential $100,000 $150,000 $350,000 $500,000

$40,0

00

$60K / $40K = $100,000

Question Where to research an NFIP Community in Emergency Program ?

The Community Status BookGOOGLE: fema status book

https://www.fema.gov/

.32 / .08

2.5’ ?

https://www.fema.gov/

Premium Determination$1,000 $1,000

$100,000$25,000

$60,000 .32 $192 $40,000 .08 $32$25,000 .38 $95

$0$0

$224$ 95$319

$5$324

10

15

$ 25$ 50

$ 32$292$ 44$336

$411

Premium

Fees

The FREEBOARD Difference

Basic Premium at 3’ BFE VS. Basic Premium at 0’ BFE

S: $224.00 per year $1,298.00 per year C: $ 95.00 per year $ 245.00 per year T: $324.00 per year $1,548.00 Per year Annual Savings at 3’ FREEBOARD = $1,224 ($102/MO) Savings to life, limb, property = Compliance Measure “Priceless”

Benefit-Cost Comparison FREEBOARD

Incorporating freeboard into new construction is extremely cost effective. The up-front costs are generally only about 0.25 to 1.5 percent of the total construction costs for each foot of freeboard. However, the long-term savings on flood insurance will more than offset these costs.

For example, adding 2 feet of freeboard to a new home might add $20 a month to the mortgage payment, or $240 per year. The resulting flood insurance savings could be more than $1,000 a year for a building in Zone AE (for instance, in a riverine flood zone not affected by wave action) and $2,000 a year in Zone VE.

Many States and communities have incorporated freeboard requirements into the elevation and floodproofing requirements stipulated by the NFIP. Freeboard requirements can range from 6 inches to 4 feet, and it would be up to the community to decide what is most appropriate given their location and other community conditions.

Effective April 1, 2015, a $10,000 deductible is available for residential properties, and this option must be clearly disclosed to the applicant.

40% Decrease at Insured’s “Option”

April 1, 2016 RATE ChangesUpdates to

Flood Insurance Manual

http://www.fema.gov/media-library/assets/documents/115549For April 1, 2016

2016 Flood Insurance Manual