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Important changes in flood insurance - The Galveston County Daily News: Business Review

December 3, 2016

Important changes in flood insurance

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Posted: Tuesday, February 11, 2014 12:00 am

Galveston Insurance Associates (GIA) has been the agent of choice for families and businesses for 122 years. Founded in 1892, GIA is the oldest agency in the county and largest on Galveston Island, providing reliable, quality insurance products and service to their customers throughout the State of Texas. 

Everyone knows that insurance is confusing, especially flood insurance. As policyholders and property owners who are also affected by Flood Insurance Reform, GIA’s agents understand your concerns. While there has been a lot written about changes to the National Flood Insurance Program (NFIP) as a result of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), there are important changes which are effective June 1, 2014, but have received little press. Below are a few of those changes. 

Maximum Building Coverage Limit for “Other Residential” Buildings

The Maximum Building Coverage Limit for “Other Residential” Buildings will increase to $500,000 from the current limit of $250,000. The Maximum Contents Coverage Limit remains at $100,000. The NFIP defines “Other Residential” as a residential building that contains 5 or more apartments/units. Examples are apartments, dormitories and assisted-living facilities but not Residential condominium buildings covered on an RCBAP flood policy or individual units in a residential condominium building. 

In early March, letters will be sent to all eligible policyholders and their agents, advising their building coverage limit can be increased. There is a 30-day wait from the date the request for increased limits is made to the company until the change goes into effect. Also, the company must receive the resulting additional premium within 10 days of the request. Policyholders wanting the increase to be effective on June 1 should make their request to the company no later than May 2.

Deductible Changes

Policies for Pre-FIRM, subsidized properties (built prior to 1/1/1975 and not rated using Elevation Certificates) that are located in most flood zones will have minimum deductibles of $1,500 or $2,000, depending upon the coverage limit. All policies that are rated as Full-Risk using Elevation Certificates, as well as properties located in “Preferred” zones, will have minimum deductibles of $1,000 or $1,250, again depending on the coverage limit.

Revised Primary Residence Definitions – For Rating Purposes

NFIP has revised the definition of primary residence to “A building that will be lived in by the insured or the insured’s spouse for more than 50 percent of the 365 days following the policy effective date.” This definition will only affect renewal policies effective on or after 6/1/14 for pre-FIRM risks rated with subsidized rates (not using Elevation Certificates). Insurance companies will notify affected policyholders and their agents, advising them of the change along with a listing of acceptable proof of primary residency. 

GIA has dedicated departments for Personal, Business, Life and Health, and Financial Products. These departments are staffed with licensed, accredited Account Managers and Sales personnel who are committed to serving the insurance needs of their customers. 

GIA’s Associates invite you to contact them today for an insurance review and start receiving the benefits of having all of your policies with an Independent Insurance Agent who is committed to service before and after the storm. 

GIA has two convenient offices, on Galveston Island, 6025 Heards Lane, and in Friendswood, 1102B South Friendswood Drive. Call (409) 740-1251 or (281) 442-1892. Or, visit www.gia-tx.com. Better yet, download their smartphone app for iPhones and Androids!