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FEMA/NFIP Issues Rule on BW 12 Wind vs. Water

This FEMA/NFIP bulletin, w-13058, is their policy to facilitate implementation of the provision of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) requiring FEMA to participate in state-sponsored non-binding mediation of wind versus water disputes, when appropriate...
September 27, 2013

This FEMA/NFIP bulletin, w-13058, is their policy to facilitate implementation of the provision of the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) requiring FEMA to participate in state-sponsored non-binding mediation of wind versus water disputes, when appropriate. The FEMA policy will enable our state partners, Write Your Own (WYO) companies and NFIP insureds to understand the role of FEMA, WYO companies and other stakeholders in wind-versus-water mediation. This policy is made necessary by the importance of the subject, the statutory requirements, limited available Federal resources and limitation to the Claims and Appeals Branch participation.

This bulletin provides the process of what and how FEMA/NFIP will participate. Key to this BW12 provision is that it depends upon “The State” deciding that it wants this type of program, whether or not they currently have a wind pool and NFIP flood claims coordination program.

PIA affiliates and members should stay aware as to what your state’s action may be in this area. The insurance industry has continually expressed concerns that an NFIP wind-water claims controlled process may conflict, confuse and interfere with the terms and conditions already clearly stated in the private sector property insurance policy-contracts. These are directed by and based upon well-established, current state courts’ consistent articulation regarding wind damage covered under private sector policies.

If your state is considering movement towards this BW12 optional approach, please advise us immediately (davidep@pianet.org) so that we may work together to keep separation between the flood exposure covered under NFIP, and what constitutes wind damage covered under private sector property policies.

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