FEMA should make minor revisions to the Homeowner Flood Form to provide policyholders with greater clarity: • In order to improve uptake of the endorsements and to reduce confusion, the Homeowner Flood Form should contain cross-references to the endorsements where the terms of the endorsements conflict with the terms of the general policy. [...] A homeowner may receive a discounted premium if, for example, the machinery in their home has been elevated to above the first floor, the home is elevated, the walls have proper flood openings to avoid damage to the foundation, or the home is watertight and certified floodproof.33 On the declarations page, FEMA should disclose to homeowners whether there are actions they can take to reduce flood r. [...] To the extent climate change results in the administration of substantially more flood insurance policies, necessitating training of additional insurance agents, only the component of additional training caused by the revisions to the form could be attributed to the Proposed Rule. [...] The Proposed Rule creates five new endorsements that will allow homeowners to tailor the coverage they receive.75 Based on FEMA’s presentation in the Proposed Rule, the Homeowner Flood Form will include language applicable to all policies, with the language of the various endorsements in appendices at the end. [...] 13 make things clearer for homeowners, and to remind homeowners of the availability of these endorsements, FEMA should reference the endorsement coverages within the body of the main policy document, where the policy and endorsements currently conflict.
Authors
- Pages
- 14
- Published in
- United States of America
Table of Contents
- I. FEMA Should Take Additional Steps to Prevent Flood Losses, Through Advance Payments for Net-Beneficial Loss Prevention Measures and Disclosures on How Risk Mitigation Affects Premiums. 3
- A. FEMA should provide advance payments for loss prevention measures taken by homeowners in preparation for an imminent flood. 3
- B. On the declarations page or in an accompanying rider, FEMA should disclose how flood resilience practices at the community and individual level affect a homeowner’s premium and how climate change may increase the risk of flooding. 5
- II. FEMA Should Revise the RIA to Conform to Best Practices Under Circular A-4. 8
- A. FEMA should choose a baseline that reflects increased climate change-related flooding and assess how the changing baseline affects the costs and benefits of the Proposed Rule. 8
- B. FEMA should conduct a distributional analysis of the Proposed Rule to improve its understanding of the costs and benefits of its action on different communities. 10
- III. FEMA Should Add Cross-References Within the Body of the Policy, Where the General Policy Conflicts with Endorsements That Homeowners May Have Purchased. 13