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NFIP April 1, 2015 Revisions Being Implemented

Recent legislative changes to the National Flood Insurance Program (NFIP) created new requirements agents selling NFIP-backed flood insurance need to understand. The changes are designed to create a more financially stable NFIP. Most changes due to the legislation that affect flood insurance are in place or became active on April 1, 2015.

However, the changes in the flood insurance program, resulting from action by Congress, are complex and do not all take effect at the same time. In addition, sometimes changes that are announced must be harmonized with aspects of the program which remain in effect.

Here is a memo prepared by PIA National regarding the latest round of changes that were effective April 1, 2015, and that require certain specific actions by agents going forward. Resource material is also included in this memo.


TO:                 PIA Agents Involved in Flood Insurance Sales
FROM:            PIA National
DATE:             May 6, 2015
RE:                  Further NFIP Clarification on April Changes

April 1, 2015 Changes: National Flood Insurance Program (NFIP) reforms and changes are still in a very fluid environment.  This is why after FEMA/NFIP issues each new package of changes, they then publish subsequent "clarification" bulletins that add to and/or amend portions of previously-issued instructions.  The April 2015 changes are no exception.

A. The full set of bulletins issued directly addressing April 1, 2015 changes begin with  w-14053 issued October 1, 2014 through to w-14055, w-14063, w-15003, w-15004, w-15007, and w-15011a, published March 18, 2015.  

B. These are in addition to the revised manual issued for April 1, 2015.

FEMA/NFIP Surcharge FACT Sheet. This is the latest corrected version (issued April 30, 2015) of the FEMA/NFIP FACT Sheet on Surcharges that everyone should be using.  Please delete all other versions on this subject.

PRIMARY Residence and FEMA/NFIP-issued bulletin w-15017 (attachments 2 and 3)(read together with w-13070, w-1448 and w-14028).  This latest bulletin provides two things: (i.) an updated list of what documents can be used to show/demonstrate/prove primary residence – and – (ii.) includes a letter that is going to residential policyholders on this subject. 

What has changed? 
  • Recently, FEMA/NFIP officials made clear to WYOs and agent-representatives that policyholders are to be receiving both the letter on the primary residence issues, and an additional notice about the GW14 Surcharge matter (even though there is overlap).  

  • Some WYOs have been late in getting their notices out.  Nonetheless, FEMA/NFIP expects that all policyholders affected by these changes as of April 1 will be notified by whatever means, which touches upon the role of the agents.

  •  So, PIA agencies' reference materials for their flood insurance customers and prospects need to follow suit with the latest FEMA/NFIP information and instructions from your WYO.

The notice on primary residence makes several critical points clear to policyholders:

  • The difference in the new federal surcharge amount for primary ($25) vs. other residence status on insured properties ($250).

  • For rating and pricing purposes, primary residence status will be based on living in the property as "primary" (not to be confused with principal residence) 50% of the time.  

  • Please also note that while primary equals 50% use/365 days applies for rating and pricing, claims will still be settled using primary residence equals actually living in household as primary residence for 80%/365 days.  

  • FEMA/NFIP is now requiring the NFIP policyholder to provide their agent/WYO with evidence of their primary residence status.  

  • On new policies/closings where the "proof documents" may not yet be available, the owner may sign FEMA/NFIP provided affidavit.  

  • Otherwise, they are to provide copies of and from among the listed documents for Proof of primary residence BEFORE renewal.

  • FEMA/NFIP makes clear that should the policyholder fail to provide the proper evidence and/or fail to respond, they will not be rated or priced as a primary residence which in turn terminates the FEMA/NFIP benefits and exceptions that go along with that.

  • This means instead of a $25 surcharge, a $250 surcharge will be applied.  The building will then be treated as non-primary, subject to a different and higher rate tier.  They will also lose the benefit of RCV claims coverage for AVC basis, and so forth.

What this means to PIA agencies
  1. These are material and important changes that now demand that the policyholder respond on a timely basis and in compliance with the documentation listed or face certain financial consequences.

  2. FEMA/NFIP and WYOs reported that policyholders seem to be overlooking these new notices.  In these cases, FEMA/NFIP advised that policies will then need to be issued and billed without primary residence status.

  3. Should the policyholder at a later time decide to provide the required documentation, primary residence and its benefits may only be added-back in and for the policy year in which the documentation was finally received with no retro-application considered.

  4. PIA member agencies may wish to highlight and underscore these critical points, including the difference between when FEMA/NFIP uses the primary residence 50% vs. 80% rule, in the agency information and conversations that you have with your policyholders and prospects.  

FEMA/NFIP Resource Material:
In order to keep up with the many reforms and program changes coming from FEMA/NFIP, PIA agencies involved in selling NFIP-backed flood insurance policies will need to stay informed of these ongoing changes. As we pointed out, these changes are being instituted piecemeal and often require agents to reference previous communications. It can be a daunting task. Here are some references that will help:
A.    The information and instructions provided by your WYOs.
B.    Webinars sponsored by FloodSmart/FEMA/NFIP
C.    NFIP iService Bulletins (  
D.    Current Manual in play for NFIP April 2015 ( which also gives you access to archived, previous manuals for your reference.
E.     Current Adjusters/Claims Manual (same link as noted previously).
F.     Current FEMA/NFIP fact sheets and other additional information materials provided (
G.    And follow the information provided by PIA National through PIA Newsline.
H.    As always any questions, suggestions or comments are welcome (

National Flood Insurance Conference Slated for May 17-20

The National Flood Insurance Conference will be held May 17-20 in Crystal City, Virginia. This annual event was previously sponsored, through 2013, by the Department of Homeland Security (DHS), the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP). However, changes in government ruled no longer allowed them to do so.
The Property Casualty Insurers Association of America (PCI) stepped forward to fill the need by working with the WYOs, Flood Insurance Producers National Committee (FIPNC), state flood plain managers, other flood-insurance industry representatives and FEMA/NFIP to produce this year's conference.  Its dual-focus is on managing the changes in NFIP, and discussing what may and perhaps should be addressed in the upcoming 2017 NFIP Reauthorization. 

Of particular interest to agents is Tuesday's afternoon's programing. It features an agents' panel (featuring PIA National President, Richie Clements, along with several other agents) discussing how to still develop flood business while making the changes in procedures for new compliance requirements.  This is followed by an E&O panel discussion moderated by Rita Hollada, longtime PIA member expert and flood insurance educator.  They will discuss claims lessons from recent flood events and processing challenges.  Together, these two sessions have been approved by the Virginia DOI for 2-hours of CE in P&C. For further information and registration:

Education: NFIP

For most of us, it isn't hard to recall the large amount of rain that has inundated the state of Nebraska and Iowa. Most of us know or have had first hand experience with excessive amounts of water and the damage that it can bring with it. With a dramatic increase in the amount of rain, that we have seen recently, it only makes sense that we educate our members and others about the importance of offering flood insurance to clients. The more you know about flood insurance, the better prepared you can be when clients ask about it, and want to protect their property with it. 

The training class will cover rules and regulations of flood insurance, policy form s and coverages, elevation certificate training and increased cost of compliance.

This course is approved for four (4) hours of continuing education credits in Nebraska and Iowa.

If you're interested in becoming a National Flood Insurance Program (NFIP) agent, they have an upcoming training class that will cover rules and regulations of flood insurance, policy forms and coverages, elevation certificate training, and increased cost of compliance.

Register online

Questions? Call 402-392-1611 or email for answers.


PIA Nebraska & Iowa Awareness Campaign

Flooding, according to the Federal Emergency Management Agency, is the most common natural disaster in the United States.  As many association members have seen, flooding can even occur in low-risk areas.

If you have additional questions, please free to contact PIA at 402-392-1611.

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