The NFIP has made an important Claims Factor rule change.
Earlier this year I express my concern in a blog post on the NFIP proposed prior claims history. My main concern is that new homebuyer would be buying homes that have a hidden history of flood claims and then get hammered when they file their first claim as the NFIP had planned to penalize a property for all historical claims.
Here is that post if you are interested in reading flood insurance claims FEMA 2-0.
Now it appears that the NFIP has come to their scenes.
FEMA 2.0 – Claims Rule change 4/1/2023
The NFIP prior claim factor rule is changing the biggest changes are
• 10-Year Window – this changed from 20 years which changed from the entire history.
• Excludes claims dated prior to 4/1/2023 – Its interesting this one because they use to look at all claims (which they are the only one that has the history)
• Excludes loss avoidance claims – these were included in the old rule.
What is Loss Avoidance claims?
A loss avoidance is where you make efforts to minimize flood damage prior to the actual flood event. This can be sand bagging, or moving personal items to a different location in order to keep them from being flooded. The NFIP use to count this as a claim. Which we think is unfair.
Idea we flood nerds are most excited about is that the NFIP took the 20 year look back to only 10 this makes scenes since there can be flood mitigation that the community has done to help properties avoid future losses these are usually done post major losses no need to dig up old skeletons.
Another good clarification is claims that are made within 10 days of each other are counted as one claim. Whew.
Our Friends at Assurant created this nifty graphic to help clarify this important change.