In 1999, Hurricane Floyd flooded thousands of square miles of eastern North Carolina and left thousands of people homeless. This disaster highlighted North Carolina's vulnerability to natural disasters and the need for accurate, up-to-date floodplain maps for safer floodplain development standards.
In September, 2000, North Carolina, in partnership with the Federal Emergency Management Agency, began remapping the state's floodplains using advanced digital floodplain mapping technology. Since then, flood maps for all 100 counties have been revised and are scheduled to be updated, on average, every five years.
Click here to go to the Floodplain Mapping Website.
Changes to Flood Insurance
The Biggert-Waters Flood Insurance Reform Act was signed into law July 6,2012. The bill reauthorizes the National Flood Insurance Program (NFIP) through September 2017 and brings several substantive changes to the program, including several that alter the way premium rates are calculated. In addition to raising the limit on the annual premium increases to 20 % (from 10 %), it includes two major changes that result in the discounted insurance rates being discontinued for all properties except Pre- Flood Insurance Rate Map (FIRM) primary residences that have not lost their qualification for the rate.
CHANGE 1: PreFIRM rates will be discontinued for all business properties and other buildings that are not considered a primary residence. (To be considered a primary residence, the insured or insured spouse must live in the building at least 80 % of the 365 days following the policy effective date.) PreFIRM refers to buildings built before 1975 or before the community received its first Flood Insurance Rate Map. Pre-FIRM rates for currently insured properties expire with termination of an existing policy and are not available for a new policy on the property. Currently insured properties that no longer qualify for Pre-FIRM policies will see their premiums increase 25% per year until actuarial rates are achieved.
A Pre-FIRM primary residence will lose its qualification for Pre-FIRM rates under the following conditions and situations:
- When the policy-holder intentionally lets the policy lapse.
- When the property is sold. A new policy cannot be written at Pre-FIRM rates.
- If, after July 6, 2012, the building is improved and the cost of improvement is more than 30% of the fair market value of the building before improvements were begun.
- If, after July 6, 2012, the building is substantially damaged and the cost to restore it to its pre-damaged condition is 50% of the fair market value of the building before damage occurred. For substantial damage, the “cost” is the cost to restore the building to its pre-damage condition - even if you don't plan to spend that much or to restore it fully. It also includes the cost of discretionary improvements you plan to make as part of the restoration project.
- If the flood insurance claims history on the building meets one of the following criteria:
- Total NFIP claims paid for flood-related building damage exceed the fair market value of the building
- The property is a severe repetitive loss (SRL) property – A single family property with 1-4 residences is an SRL property if it has incurred flood-related damage resulting in four or more claims payments for building damage that exceed $5,000 each, OR, two claims payments for building damage that together exceed the value of the insured building.
- If the owner of a repetitive loss property refuses an offer of mitigation assistance (to raise or relocate the building), including an offer under the Hazard Mitigation Grant Program (HMGP)
CHANGE 2: Grandfathered rates are being discontinued. A grandfather rate was applied to buildings built in compliance with the FIRM at the time of construction, but a more recent FIRM shows the building to be at a greater risk. These buildings have been grandfathered administratively, and were allowed to keep the rate-class (flood zone and building elevation relative to base floor elevation) that applied at the time of construction. The premiums will now increase toward actuarial rates phased in over a five-year period with 20 % of the increase added each year. The five-year period begins on the effective date of the FIRM that identifies the increased risk. For example, if the actuarial rate is $1000 per year more than the subsidized rate, the premium would increase $200 per year for five years.
When will these changes take place? For those Pre-FIRM properties that fall under CHANGE 1, the changes took place October 1, 2013. For those Post-FIRM properties that fall under Change 2, the implementation date is anticipated to be October 1,2014.