Preferred Risk Policy (PRP) Eligibility Extension Information

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Preferred Risk Policy (PRP) Eligibility Extension Information

Preferred Risk Policies are offered by the NFIP to home owners and residents in some moderate to low risk flood areas for low cost flood insurance. Prices start from only $129 for $8,000 in contents and $20,000 in building insurance, or (particularly for renters) $8,000 of contents cover from only $49. When you compare these rates with the minimum amount of $405 for standard rate cover, there’s no wonder that many people are delighted to find that their homes are eligible for PRP’s.

Unfortunately the world is ever changing (well, I say unfortunately but I suppose it’s fortunate in many ways), anyway, unfortunately for some people, where as their property might have been in a moderate to low risk classification area 10 or so years ago, it is quite likely to be reclassified under the new revisions to a high risk area, not only meaning that your property now has a perceived higher likelihood of flooding but also that your flood insurance premiums are likely to rise quite sharply.  This can be due to many different reasons, for one thing the data and equipment which they use these days to calculate the amount of flooding risk involved for each area is far superior to the outdated equipment which was used in the beginning. Apart from that the risks of flooding can also be affected by things like new developments and long-term climate changes.

Preferred Risk Policy (PRP) Eligibility Extension Information

At last, we’re getting back to the title of the page, the PRP eligibility extensions. You see, unfortunately for those poor souls who’s houses have moved zones without them knowing anything about it, the difference in the cost of the insurance premiums can make quite a shock to the bank balance.  As the remapping of the zones is now well under way, the eligibility extensions have been revised as such:

  • Any property which was newly mapped because of a revision between 1 October 2008 and 1 January 2011 are entitled to a PRP policy for a further two years, between 1 January 2011 and 31 December 2012.
  • If your property is mapped after 1 January 2011 then you’ll be eligible for PRP for a further two years after that date.
  • If your property does have a flooding history, however, with 2 or more claims or applications for flood disaster relief payments of $1,000 or more then you are definitely not eligible for PRP.
  • Once these extension periods are past, the buildings will no longer be eligible for Preferred Risk Policies and must revert to a standard rate policy.
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