NFIP Announces Relief for Newly Mapped Properties—Fidelity Can Help
In an effort to offer financial relief to affected property owners, the NFIP has extended an additional 2
years’ eligibility to the lower-priced Preferred Risk Policy (PRP) to property owners mapped into high-risk
flood zones (SFHA). To be eligible, properties must have been previously mapped in a low risk B, C, X or
D zone and currently mapped into high risk on new revised flood zone maps effective on or after October
1, 2008 and must meet all other PRP policy eligibility criteria.* The two additional years of eligibility for
PRP rated policy premiums will start with the renewal after January 1, 2011 for 2 years for both new and
renewal policies. Upon completion of the additional 2 years’ eligibility, PRP policies will convert to the
NFIP Regular policy type with higher rates. These converted regular policies may then become eligible
for grandfathering rule premium discounts in most cases.
Currently, the NFIP Preferred Risk Policy (PRP) offers flood coverage at lowest cost to properties
designated in low to moderate risk zones on NFIP flood zone maps that meet loss history requirements.
A property is not eligible for PRP if, within any 10-year period, the structure has incurred two or more
flood insurance claim payments or disaster relief payments (including loans and grants), each more than
$1,000. With this latest program change, the eligibility to purchase the PRP policy will now be extended
to properties that have been designated in high-risk zones because of a flood map change on or after
October 1, 2008 but that would have qualified for the PRP policy prior to the map revision. This new
extension goes into effect January 1, 2011 for both renewal policies and new business. Current
policyholders and agents will be informed by mail of their eligibility and renewal offers for the policy terms
in 2011 and 2012 which will reflect the conversion to PRP and the lower premium rates.
How is eligibility determined?
· Properties currently insured: Policyholders with properties that have been newly mapped into
high-risk flood zones due to a flood map revision on or after October 1, 2008 and would have
qualified for the preferred program on the prior map, may now be eligible for policy conversion to
a Preferred Risk Policy on or after January 1, 2011 through December 31, 2012.
· Properties not previously insured: Properties that have been newly mapped into high-risk
flood zones due to a map revision on or after October 1, 2008 and would have qualified for the
preferred program on the prior map, not previously insured, may now be eligible to purchase a
PRP policy for two years on or after January 1, 2011 through December 31, 2012.
· Properties affected by future map changes: Properties that become newly mapped into a
high-risk flood zone due to a map revision on or after January 1, 2011 are eligible to purchase a
PRP for two policy years from the map revision date.
What happens after the two-year extension?
Pre- and Post-FIRM buildings mapped into a high-risk area after October 1, 2008 will be eligible to
grandfather after the two PRP policy years are completed. To qualify for grandfathered rates after the
two extended PRP policy years, the grandfathering guidelines must still be met. That means pre-FIRM
buildings must maintain coverage continuously and have no substantial damage or improvement to be
eligible for grandfathering after the PRP extension period is over.