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November 1st 2015 Flood Insurance Changes!


As of yesterday, FEMA has implemented some changes to how flood insurance is rated.  Below is a summary of the changes.  Nothing earth shattering here, but they are changing the way that non-residential buildings are rated.  This will lead to the 18%-25% rate increases in April 2016.   Reach out to one of our experts if you have questions!

NFIP announces November 2015 Flood Program Changes


Although the November 2015 NFIP changes, condensed below, do not include annual premium increases, they will have a significant impact on premium rates into the future.  We encourage you to read them in this summary or in total via the NFIP Bulletin W-15016.

Separate Business use from Non-residential use policies for rating purposes

Effective November 1, 2015, the NFIP will split the current Non-Residential building occupancy category into 2 rating categories:  “Non-Residential Business” and “Other Non-Residential”, to accommodate a future (2016) implementation of Pre-FIRM increases specific to business properties.

For rating purposes, a Non-Residential Business property refers to a building where a licensed commercial enterprise is carried out to generate income and coverage is for one of the following and Pre-FIRM buildings will be subject to the BW-12 subsidy reduction with a premium increase of 25% annually.

    • a building designed as a non-habitational building;
    • a mixed-use building, with more than one single family unit, in which the total floor area devoted to commercial uses exceeds 25% of the total floor area within the building1; or
    • a building designed for use as office or retail space, wholesale space, hospitality space, or for similar uses.

An Other Non-Residential property is a structure not in use for business or for residential-as noted below.  Pre-FIRM non-residential buildings will be subject to the HFIAA premium increase cap of 18% annually.


Houses of worship
Non-profit entity
Tool and storage
State and Local Government
Pool houses
Recreational buildings
Non-commercial farm buildings
Non Commercial agricultural structures




Business Use Questionnaire to be completed by Agents

 The Non-Residential Building Use Questionnaire will be sent to agents no less than 90 days prior to expiration of the current term to classify non-residential policies into either Business use or non-residential use prior to the next renewal. If the business or non-residential use information is not returned, the business use rate tables will be noted on the renewal indicating eligibility for the 25% premium increase. If the use information is received during the policy term an endorsement to correct can be issued.

Changes to the Cancellation and Endorsement Refund Rules

The NFIP refund rules will be changed:

  • to add eligibility for prior-term refunds for specific cancellations and endorsements
  • to limit prior term refunds to 5 years to match the Federal requirements to retain documents for 5 years.
  • to limit premium refunds for specific cancellations to the current policy term only
  • Establish non-refundable status for Federal Policy Fees and HFIAA Surcharges, except in very limited circumstances when the cancellation effective date is mid-term.

Wright Flood Summary of the Revised Cancellation Refunds Effective 11-1-2015 offers a table view of each cancellation reason and how each is affected by the latest changes.


Floodproofing Certificate for Non-Residential and Business Structures is revised

FEMA has revised the instructions to the surveyor to include additional documentation requirements. In addition, the Floodproofing Certificate will apply only to finished construction; the elevations can no longer be based on construction drawings or a building under construction.

 Incorporation of certain Submit for Rate Tables into the Flood Insurance Manual

The submit for rate tables for slab on grade structures where the lowest floor for rating is below the base flood elevation is being incorporated in the NFIP Flood Insurance Manual. Merging the rates of these two manuals will facilitate the public’s access to the accurate rating information.

Changes to the Flood Insurance Underwriting Forms

FEMA has revised the Application, Endorsement, and PRP application forms to capture information required for implementation of certain provisions of the BW-12 and HFIAA legislation.

The NFIP Changes noted here are as announced in FEMA Bulletin W15016 and are subject to clarification and revision by the NFIP at any time.  They are communicated here as a convenience to our agents and policyholders only.  Any changes or disputes can be verified with the NFIP iService bulletins.  Future training for November, 2015 NFIP Changes will be forthcoming via webinars and communications through Wright Flood.


1For a single-family building (e.g., detached house, townhouse, or rowhouse), the building is classified as either non-residential business or other non-residential if 50 percent or more of the total floor area is used for business or non-residential purposes.

This summary was taken from Wright Flood’s publications.  We felt they summarized the changes better than FEMA and NFIP.


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