BEING PREPARED FOR MAP CHANGES What to Know; What to Say National Flood Conference May 16, 2016 0
Discussion Topics Risk MAP Program Background Eric Simmons FEMA Region 9 Map Change Rating Options Edie Lohmann, CFM, ANFI FEMA Region 9 Mapping Tips & Tricks Mel Hodges, ANFI Torrent Technologies Outreach, Messaging & Resources Bruce Bender, CFM Questions 1
RISK MAP PROGRAM BACKGROUND ERIC SIMMONS 2
Early Flood Maps (e.g., Crystal City) 3
Current Flood Mapping in Crystal City 4
What is Risk MAP? Through collaboration with State, Local, and Tribal entities, Risk Mapping, Assessment, and Planning (Risk MAP) will deliver quality data that increases public awareness and leads to action that reduces risk to life and property 5
Modernized Flood Hazard Mapping 6
National Flood Hazard Layer (NFHL) FEMA Map Service Center Website: http://msc.fema.gov/portal GeoPlatform Map website: http://fema.maps.arcgis.com/home/ Web Map Service (e.g., NFHL in Google Earth) Your own GIS. For more information search: data.gov nfhl 7
NFIP Flood Map: Basic Components + Base Mapping Flood Hazard Data = Digital FIRM 8
New FIS and FIRM Format Revised FIS Reports and digital FIRMs will continue to fulfill regulatory requirements and support the NFIP 9
New Risk MAP Products Changes Since Last FIRM Depth Grids 10
Updating Flood Insurance Rate Maps 1,000+ active mapping projects; 4-10 FIRMs revised every other week Local partners are a key component of the Risk MAP Program FEMA s mapping focus past 5 years has been coastal Nearly 100 levee mapping projects initiated nationally since 2013; 200+ additional studies need resources in 2016 and beyond 11
FEMA Flood Mapping Lifecycle All encouraged to ask questions, participate in mapping process and attend public events Discovery: beginning of a Risk MAP project Preliminary FIRM: public can view draft maps online Post-Preliminary FIRM: another opportunity to follow up Compliance Period: final time for outreach before effective 12
MAP CHANGE RATING OPTIONS EDIE LOHMANN, ANFI, CFM 13
Map Change Scenarios 1. Newly mapped into a high risk area 2. Removed from the high risk area 3. Change in type of high risk area 4. Change in Base Flood Elevation 5. No change 14
1. Newly Mapped into a High-Risk Area Flood zone D, B, C, X to A or V Increased flood risk D, B, C, X Mandatory purchase applies Newly Mapped Procedure A or V 15
2. Change in Type of High-Risk Area Flood zone AE to VE Changed risk AE to VE Mandatory purchase applies Grandfathering Continuous Coverage Built in Compliance AE VE 16
3. Change in Base Flood Elevation Flood zone remains the same Increased/decreased flood risk AE (or VE) Mandatory purchase applies Grandfathering Continuous Coverage Built In Compliance 3 feet 5 feet 17
4. Removed from the High-Risk Area Flood zone A or V to B, C, X Low-risk does not mean no risk B, C, X Flood insurance optional, but recommended Convert to the Preferred Risk Policy A or V 18
5. No Change Flood zone remains the same No change in flood risk Review Coverage No Change 19
UNDERWRITING TIPS & TRICKS MEL HODGES, ANFI 20
Newly Mapped Into SFHA Following a map revision, a building newly mapped into an SFHA can be rated as a Newly Mapped Policy. This rate will be equal to the PRP rate for the first 12 months of the policy After the first year of the Newly Mapped policy, the rate will begin its transition to a full-risk rate with annual rate increases of no more than 18 percent each year. 21
Newly Mapped Procedure 11/11/2016 Map Effective Date 11/10/2017 12 mos. after Map Effective Date 2016 Standard Zone X = $2,033 2015 2016 2017 2018 2019 Zone X PRP Policy $441* 1/1/11 Zone AE Newly Mapped Property (PRP Rate*) $490 Newly Mapped Property Rate** $565 Newly Mapped Property Rate** $650 11/09/2016 New Policy Effective Date 11/09/2017 Renewal Date 11/09/2018 Renewal Date 11/09/2019 Renewal Date $200K/$80K Building/Contents April 2016; excludes HFIAA Surcharge *Current PRP Rates (assumes 3 % increase) plus higher RFA and FPF) **Guesstimates Actual planned rate increases unknown Bender Consulting Services, Inc. 22
Grandfathering BFE or Zone When flood map changes occur, a lower-cost rating option known as grandfathering is available. It is available for property owners who: Already have flood insurance policies in effect when the new flood maps become effective and then maintain Continuous Coverage; or Have Built in Compliance with the FIRM in effect at the time of construction. Grandfather the best PREMIUM, not the best ZONE e.g. AE +3 may be lower premium than PRP or STD X 23
Mapped Out of SFHA Cancel/Rewrite Reason 24 to PRP (Conversion) Cancel/Rewrite Due to Map Revision, LOMA, or LOMR (Page CN 9 of FIM): Used to cancel and rewrite a standard-rated policy to a PRP as the result of a map revision, LOMA, or LOMR. The standard-rated policy will be canceled and rewritten as a PRP. Premium from the canceled policy will be applied to the PRP, with the difference refunded to the policyholder. The agent/producer will retain the full commission on both policies, and the company s expense allowance will not be reduced. 24
Mapped Out of SFHA Proactively change to PRP as soon as map changes to try to retain the business. At WYO direction, we will endorse to PRP (if eligible), and send a new declarations page and refund to the insured. 25
Multi-Rating Comparatively rating against all possible/eligible/valid rating methods or paths Determine total premium based on new zone / BFE; then check: Grandfathering Newly Mapped PRP Conversion Pre-FIRM Subsidized Pre-FIRM Actuarial (EC-Rated) Prior SFHA with EC rates may be better than current B,C,X STD rates. Annual premium may be lower by grandfathering the SFHA with an EC. Rating with lowest total annual premium that the insured is eligible for provides the best customer experience. 26
ive OUTREACH & MESSAGING BRUCE A. BENDER, 27 CFM
AGENT/WYO ENGAGEMENT Connect with community officials early. When released, note where changes occur. Critical time to reach out to clients; get ahead of the media. Great opportunity to reach out to prospects. 28
AGENT/WYO ENGAGEMENT OPEN HOUSE Public can view maps; ask local officials questions. Encourage clients and prospects to attend. Typical questions to prepare for: How am I affected? If newly mapped in: How do I get out of it? What s the cheapest cost for flood insurance? So Know Your Rating Options 29
AGENT/WYO ENGAGEMENT Final opportunity to reach out before effective date. Review existing residential and commercial clients to see how they are affected. Even if not affected, are they properly covered? Great prospecting opportunity as well. 30
MESSAGING Newly Mapped into High-Risk Area The area your building is in has been newly identified as a high-risk area for flooding. Most lenders require flood insurance in these areas. If you don t carry a mortgage, you should still protect your investment with flood insurance. National statistics show that you are more likely to experience a flood than a fire. The NFIP offers options to help you save on flood insurance. Purchase and have a PRP in effect before the new maps become effective to maximize your savings and reduce your financial risk now. 31
MESSAGING High-risk to Higher-Risk (BFE or Zone) Your building is now at an even higher risk of flooding. Rates are higher for higher-risk areas. Purchasing a policy before the map revision allows you to lock in the lower-risk zone or BFE for future rating, and therefore save on insurance. Renew the policy each year to stay financially protected and save money. In high-risk areas, there is at least a 1 in 4 chance of flooding over the life of a 30-year loan and a greater chance of a flood than a fire. 32
MESSAGING High-risk to Moderate-Low Risk Your risk is reduced, not removed. People in moderate- and low-risk areas file more than 20% of all NFIP flood insurance claims and receive one third of flood disaster assistance. You may be eligible for a lower-cost PRP, which includes contents. Stay financially protected and get money back once the map is effective. There will be no gaps in coverage and no additional money up front. 33
MESSAGING No Change in BFE or Zone Still at risk; understand your level of risk If currently has flood insurance: Is it at current replacement cost? Are the contents fully covered? If not currently covered for flood: Do they qualify for a PRP? If they don t want coverage, have them decline in writing! 34
RESOURCES 35
FLOODSMART.GOV 36
Agents.FloodSmart.gov 37
Agents.FloodSmart.gov FloodSmart Resources for Agents Newly Mapped Procedure Fact Sheet Flood Map Change Tips Fact Sheet Grandfather Fact Sheet PRP Conversion Fact Sheet Flood Insurance Waiver Template Direct Mail Postcard Template Direct Mail Letter Template FEMA Resources for Agents NFIP Training Modules www.fema.gov/agent-training 38
Agents.FloodSmart.gov + Risk MAP Risk MAP Depth Grid 39
Other Resources MSC.FEMA.gov 40 www.fema.gov/risk-mappingassessment-and-planning-risk-map
Other Resources 41 www.fema.gov/medialibrary/assets/documents/113813 www.fema.gov/medialibrary/assets/documents/107663
QUESTIONS? I know, but calling it Grandmothering just doesn t have the same effect! 42