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GIA: Keeping up with flood insurance changes - The Galveston County Daily News : Business Review

August 21, 2014

GIA: Keeping up with flood insurance changes

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Posted: Monday, April 14, 2014 12:00 am | Updated: 8:59 pm, Mon Apr 21, 2014.

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. 

Insurance can be confusing, especially flood insurance. As policyholders and property owners who are also affected by Flood Insurance changes, GIA’s agents understand your concerns. 

One recent piece of good news is the Federal Emergency Management Agency (FEMA)’s approval of Community Rating System (CRS) discounts for qualifying policyholders on Galveston Island. These discounts will be automatically applied to new and renewal policies with effective dates of May 1, 2014 or later.  

Not all policyholders will receive this credit; however, a 15% discount will apply to eligible properties in a Special Flood Hazard Area (A Zones & V Zones) and eligible properties in non-Special Flood Hazard Areas (B, C, X Zones) will receive a 5% discount. Additional details can be found on the Community Page at www.gia-tx.com.

More good news – in March, the President signed the Homeowner Flood Insurance Affordability Act of 2014 into law. This law changes several areas of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) which had a major impact on local property owners. The purchase of a Pre-FIRM property no longer requires immediate full-risk rates based on an Elevation Certificate. Current Grandfathering rules in effect today will be allowed to remain. The annual policy surcharge will apply to all policies and is now $25 for primary residences and $250 for all others. 

FEMA will be required to make refunds to policyholders who were required to pay full-risk rates on new policies after July 6, 2012 because of BW-12 reforms. Refunds will not apply to businesses and non-primary residences paying the 25% annual rate increases for Pre-FIRM subsidized policies. Policyholders whose full-risk premium is less than their Pre-FIRM subsidized premium are not eligible for refunds. FEMA and insurance companies are currently working on guidelines and procedures to correct rating systems and process refunds as quickly as possible. In the meantime, policies will still be rated according to BW-12 rules. One exception - new purchasers of property will be allowed to assume the prior owner’s policy and retain the same rates until the new procedures and rates are finalized.

Other sections of BW-12 still intact and effective June 1, 2014:

• The Maximum Building Coverage Limit for “Other Residential” Buildings increases to $500,000. The Maximum Contents Coverage Limit remains at $100,000. 

• Minimum Deductible Changes 

• Primary Residences — for renewal policies effective on or after 6/1/14 for pre-FIRM risks rated with subsidized rates (not using Elevation Certificates), owners will need to provide proof of primary residence. Policyholders will be notified and advised of acceptable proof of primary residency. If the insurance company does not receive proof prior to the renewal billing, the renewal rates will be based on non-primary occupancy but a refund will be made when proof is received.

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. 

Whether you live and work on the Island or Mainland, GIA has a location to serve you - Galveston Island at 6025 Heards Lane and in Friendswood at 1102B South Friendswood Drive. GIA can also be contacted by phone at (409) 740-1251 or (281) 442-1892. Or, visit their website at www.gia-tx.com. Or, better yet, download their smartphone app for iPhones and Androids!