NFIP rules allow a standard rated policy to be rewritten to a Preferred Risk Policy (PRP), with a premium refund for the current year, as long as the building was eligible for the PRP at the beginning of the current policy term. If the building becomes eligible for a PRP mid-term, due to a map revision or Letter of Map Amendment/Letter of Map Revision (LOMA/LOMR), the standard rated policy cannot be rewritten to a PRP until the next renewal. Policyholders in such circumstances, who are no longer required to carry flood insurance by their mortgagees, are likely to cancel their standard rated policies to obtain a full premium refund rather than endorse to a B, C, or X zone, where depending on how the policy is rated, may or may not receive a premium refund.

The Institute for Business and Home Safety (IBHS) Flood Committee, the WYO Marketing Committee, and the Flood Insurance Servicing Companies Association of America (FISCAA) have requested that we revise the current NFIP rules that will allow the writing company to offer the insured the option to cancel and rewrite the standard rated policy to a PRP with the same effective date, and to allow the use of the premium previously paid on the standard rated policy to rewrite the PRP. They feel that this approach will encourage many property owners to retain their flood policies and continue their coverage without a lapse. They also pointed out that this suggested rule change could help attain the program’s goal of increasing the NFIP policies by five percent. 


Note: FRS is not an Insurance Underwriter or Insurance Agent. We work on the policy owners behalf.