The Massachusetts Coastal Coalition has worked with the Massachusetts Legislature to introduce the Massachusetts Private Flood Insurance Act (HD2105 and SD1136). The MCC is proud to announce the legislation is supported by the Massachusetts Association of Realtors (MAR). The MCC has engaged with the Massachusetts Association of Insurance Agents (MAIA), which has also expressed its support for greater accessibility to private flood insurance. The support of this bill is critical to ensure greater access to private flood insurance.
Major provisions in the Act include:
Consumer protections, such as the inclusion of disclosures for consumers to understand the products they are buying.
Aligning required policy language to meet federal lending requirements to ease confusion.
Allow for insurance agents to more easily place flood insurance to offer more choices to consumers.
The MCC understands the great importance of flood insurance, and the Massachusetts Private Flood Insurance Act will allow our communities to become more resilient as more homes and businesses purchase flood insurance.
Have you listened to our Podcast recently? The MCC releases one podcast a month called the Know Flood Newscast. We take relevant topics in the news and from our newsletter and discuss them with national and local experts. Here are some recent and planned podcasts:
-Know Flood Newscast Episode 13 – Michael Hecht, GNO Inc: He’s been dubbed “One of the Ten People Who Made a Difference in the South” and “CEO of the Year”. No matter how he’s referred to, there’s no mistake that Michael Hecht Is critical to the New Orleans business scene. As President and CEO of Greater New Orleans, Inc, Michael has overseen the creation of the Coalition for Sustainable Flood Insurance (CSFI), which played a major part if the passage of the Homeowners Flood Insurance Affordability Act (HFIAA). Now, with both a September 30th legislative deadline looming and the implementation of Risk Rating 2.0 on the horizon, GNO Inc, CSFI and Michael Hecht have new challenges with similar impacts to flood insurance and the economy. Join us as we talk with Michael about GNO Inc’s efforts to understand Risk Rating 2.0, and what legislative proposals they would like to see in an NFIP reform package. Michael also discusses the New Orleans specific impacts flood reform present, and how recent storm events are examples of the importance flood insurance plays in our nation.
Risk Rating 2.0 Will Change The Industry, Not Just The NFIP
When FEMA announced the transformation of the National Flood Insurance Program (NFIP) with updated and modernized rating dubbed Risk Rating 2.0, questions and concerns were raised from various industries such as insurance agents and real estate professionals. As FEMA begins to release details around Risk Rating 2.0, it’s clear that the NFIP transformation will not just impact insurance rating, it will impact the entire flood industry. From private flood insurance companies to floodplain managers, each stakeholder will be influenced by Risk Rating 2.0’s implementation.
FEMA has branded Risk Rating 2.0 as “Equity in Action” since the coming changes will make the NFIP rates more fair and easier to understand. Equity in Action replaces the current binary “in versus out” of a high-risk flood zone pricing methodology. Rather, it uses “graduated” rating, which is a pricing methodology based on factors such as distance to water, types of flood exposure, and other advanced elements. Equity in Action will also bring more equity to NFIP policyholders by basing rates off of the building’s replacement cost. The higher the building’s replacement cost, the more expensive the premium, and vice versa.
Floodproofing.com is a one-stop-shop for flood protection products, education, and support for residential and commercial projects in the floodplain. We have an extensive portfolio of floodproofing products, including flood barriers, floodproof windows, and flood vents, that meet building codes and standards to ensure your design is compliant. Our in-house group of CFMs and Engineers, The Flood Design Team, can provide a complimentary, in-depth analysis of your project to recommend the best flood protection solutions that meet your needs.
NFIP Coordinator Flood Tips
MCC will include commentary in each newsletter from Massachusetts NFIP Coordinator, Joy Duperault. These ideas are great reminders no matter where you live!
Summer can be a time of wonderful thunderstorms as well as drought and extreme heat, especially in these days of climate change impacts. I personally play tag with the sudden storms by running my sprinkler over the vegetable garden even if a storm is on the way—a guarantee that it will come! But some of us can experience urban flooding when those heavy precipitation events pass through and last a bit longer than we thought they would. Protect your property from nuisance stormwater flooding with mitigation options such as rain gardens, bioswales or sewer back-up valves. You can find more information at Chicago’s Center for Neighborhood Technology’s Rain Ready site: https://www.cnt.org/rainready They have good reason to know about this matter! Stay safe this summer as you take one or two flood risk reduction actions.
Sue’s Flood Real Estate Tips
A different type of disclosure
As a buyer you should expect a realtor to disclose whether the existing flood insurance policy is transferrable. Continuous coverage on the property translates into a less expensive premium for the new homeowner. You should be given a copy of the policy with the elevation certificate.
When you purchase a home located in a flood zone “PLEASE” be aware your annual flood premium cost may differ from the existing home owner as well as the immediate neighbors.
Allow me to provide you with a recent example:
Home owner #1 bought a direct ocean front property –
annual flood premium $2,500.
Home owner #2 (200 yards away) also direct ocean front –
annual flood premium $800.
Home owner #2 convinced homeowner #1 they were paying far too much for their flood insurance!!
The new homeowners called their carrier very upset, absolutely convinced they were being overcharged. They brought a copy of the neighbors flood policy to the carrier to plead their case.
When the carrier looked closer at the less expensive policy several key items were discovered:
The cheaper policy was the absolute bare minimum coverage with the highest deductible. The amount would never cover significant loss or replacement, with no coverage for the contents.
The homeowners paid cash for their property. This provides them with the option to carry no flood insurance OR not enough to cover for a loss. A risk they were willing to take. *If you have a mortgage the bank requires the homeowner to carry adequate flood Insurance, the asset must be protected.
The less expensive flood policy was also covering a property that was significantly smaller, at a different elevation, on a smaller lot.
The moral of this story, you get what you pay for!!
If homeowner #1 suffers significant storm damage, his home and it’s contents are not covered. But he does pay a very low annual flood premium.
In homeowner #2 suffers storm damage he has the proper coverage for repair/replacement and contents.
Flood premium costs vary greatly depending on many factors. The coverage details should be discussed with your insurance carrier to make sure you are not underpaying OR overpaying.
*I always strongly recommend you get a second opinion from a carrier that is known for specializing in flood coverage. “A second look” has resulted in significant savings for my clients over the years. Please reach out to me anytime for a recommendation.
All About Risk Rating 2.0
FEMA has released an immense amount of information and data on Risk Rating 2.0 since the last Know Flood Newsletter. The data includes:
And there is even more. In order to present the most relevant information to you, all in one place, the MCC has created a Risk Rating 2.0 page, found here.
This page will be updated frequently. Because there is a constant release of information, we may not be sending out an email every time a piece of data is released. Rather, please check the MCC Risk Rating 2.0 page every two weeks or so for more information.
Questions on Risk Rating 2.0
We understand you may have a lot of questions on the coming changes to the NFIP. Not everyone has all the answers. The MCC can answer questions the best we can. If you have a Risk Rating 2.0 or other flood insurance question, reach out by to our flood insurance service center HERE.
NOTE: The is NO property specific rating information until after August 1st. At that time, please reach out to your insurance agent for specific rating information.
Risk Rating 2.0 Trainings
The MCC will be hosting informational sessions in the fall on Risk Rating 2.0, including at our annual meeting in November. Stay tuned to our educational page for more information.
Information about Risk Rating 2.0 is coming fast and furious from FEMA. From zip code level data to online trainings, we are getting a much better picture of what the NFIP transformation will look like. The MCC is doing our best to supply you with the relevant information as it becomes available. As noted in our NFIP Press section, the MCC now has a Risk Rating 2.0 page, with all the updated FEMA information. Additionally, the MCC will be holding informational sessions on Risk Rating 2.0 later this year, including at our annual meeting. There will be a lot of speculation and updates coming from various sources, but the MCC is dedicated to be your source for accurate and up to date information over the course of the implementation of Risk Rating 2.0.
Joe Rossi
Chair and Executive Director
Massachusetts Coastal Coalition
