A discussion of routine & complex issues which confront all types of shared ownership communities.

Condo and HOA Law Blog By Donna DiMaggio Berger, Esq.

Condo and HOA Law Blog By Donna DiMaggio Berger, Esq.
This blog covers every topic under the sun related to condominiums, cooperatives, HOAs, timeshares and mobile home communities from the unique perspective of attorney Donna DiMaggio Berger.

Monday, April 16, 2012

FEMA prohibits continued rebating of amounts paid for flood insurance in Florida condos and HOAs

The Federal Emergency Management Agency (FEMA) recently announced that it will no longer allow insurance agents to offer rebates on amounts paid for flood insurance in Florida. In a memorandum dated April 4, 2012, the Federal Government will end the practice of providing associations with rebates on flood insurance premiums, effective October 1, 2012.

The Federal Government has instructed Write Your Own (WYO) flood carriers to stop allowing agents to rebate any portion of their commission. This prohibits the rebating of commissions on all new or renewal NFIP policies. The Federal Insurance and Mitigation Administration concluded that the goals of the National Flood Insurance program are better served by a system of uniform national pricing that will ensure that policyholders pay the same price for the same risk.

One beachfront condominium association recently told me that its flood insurance rebate last year was a little over $2,000. Many Florida communities currently receive these rebates so this is not welcome news from FEMA.

What kind of rebate did your community receive last year on your flood insurance policy?

Click here to view the FEMA letter: http://canfl.com/Documents/Connor_Memo_to_WYO.pdf

This work by Donna DiMaggio Berger, Esq. is licensed under a Creative Commons Attribution-NoDerivs 3.0 Generic License.

6 comments:

Anonymous said...

I think it is imperative for all Condo Associations to understand how this change came about. Did the Independant Agents Association put out a great deal of expense and effort to make this change happen? Do the readers understand that with this change the Insurance Company does not save any money, the Condo Association loses the discount and their agent increases his or her commission by the exact amount of money the HOA loses. As if the commisions on all of the HOA Insurance wasn't enough, the Agency community makes even more at our expense. As vocal as the Agents have been is as vocal as HOAs should be with this travesty. It will be a double whammy to all HOAs when you consider the NFIP claims to be losing money and that significant rate increases for Flood coverage should be no surprise as we move forward. If rates increase by 20% per year on top of the 15% rebate loss, these dollars will add up. Our Association pays out 25% of its annual operating budget for Insurance Premiums. This maneuver adds insult to injury. Use your voice people and clearly understand

Jim Price said...

We are a highrise condo on the beach with a parking garage that is below sea level. Our last flood insurance premium was $343,500 before the rebate. Our rebate was $51,075. I am sure our insurance agent was satisfied with his commission, especially since he received commissions on all of our other policies. If FIMA is going to eliminate the rebate program, they should make an appropriate reduction in premiums and should put a reasonable cap on flood insurance commissions. At some point, the commission should be sufficient regardless of the total premium.

Bruce A Kestenbaum said...

Statewide Condominium Insurance Inc has begun a petition drive in order to force FEMA to continue to allow the rebating of flood insurance premiums. It is legal according to Florida Statute 626.572. We are hoping for over 100,000 signatures by August 1st in order to show FEMA that what they are doing is wrong. It will not change the premiums but add to the actual cost of the Flood Insurance Policies.
Sign onto our website and sign our petition.

Bruce A Kestenbaum said...

Statewide Condominium Insurance Inc has begun a petition drive in order to force FEMA to continue to allow the rebating of flood insurance premiums. It is legal according to Florida Statute 626.572. We are hoping for over 100,000 signatures by August 1st in order to show FEMA that what they are doing is wrong. It will not change the premiums but add to the actual cost of the Flood Insurance Policies.
Sign onto our website and sign our petition.

Donna DiMaggio Berger, Esq. said...

Bruce, please send that petition to my office email address via pdf so I may review and see if the power of CAN can help obtain the necessary signatures.

Thanks,
Donna

Ed Duch said...

Tell it like it is.....This is more than a travesty......where is the press on this issue? Time to speak out Association leaders!

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