How map changes affect flood insurance
When new flood maps are issued, your flood risk may become higher or lower-which can affect what you pay for flood insurance. However, there is usually a six — to twelve-month period between the time the new "preliminary" maps are issued and the time that they are implemented. This gives you adequate time to protect your property and, possibly, save on flood insurance.
This chart explains different map-change scenarios:
|If Maps Show...
||These Requirements, Options and Savings Apply
|Change from low or moderate flood risk (flood zone B, C, or X) to high risk (zone A, AE, AR, A99, AH or AO)
||Flood insurance is mandatory. Flood insurance will be federally required for most mortgage holders. Insurance costs may rise to reflect the true (high) risk.
The PRP Eligibility Extension Program can offer savings.
To ease a homeowner's transition from a moderate-to-low risk area to a high-risk area, which would require the mandatory purchase of flood insurance and an increase in flood insurance costs, the National Flood Insurance Program is extending eligibility for the lower-cost Preferred Rate Policy to properties that were remapped on or after October 1, 2008.
"Grandfathering" can offer savings. The National Flood Insurance Program has "grandfathering" rules to recognize policyholders who built in compliance with the flood map in effect at the time of construction or who maintain continuous coverage. Sometimes, though, using the new flood maps can actually result in a lower premium, especially if the home is high enough above the Base Flood Elevation (BFE). In addition, buildings newly mapped into a high-risk area may be eligible for the lower-cost Preferred Risk Policy (PRP) for two years after a map change, before they grandfather in the lower-risk zone rates.
|Change from high flood risk to low or moderate risk (flood zone A, AE, AR, A99, AH, AO to X or shaded X)
||Flood insurance is optional but recommended. The risk has only been reduced, not removed. Flood insurance can still be obtained, and at lower rates. Even though flood insurance isn't federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file nearly 25% of all National Flood Insurance Program flood insurance claims and receive one-third of Federal Disaster Assistance for flooding. When it's available, disaster assistance is typically a loan you must repay with interest.
Conversion offers savings. An existing policy can be easily converted to a lower-cost Preferred Risk Policy, if the building qualifies. Note that lenders always have the option to require flood insurance in these areas.
|Increase in the Base Flood Elevation (BFE)
||An increase in BFE can result in higher premiums; however, "grandfathering" can offer savings. The National Flood Insurance Program grandfathering rules allow policyholders who have built in compliance with the flood map in effect at the time of construction to keep the earlier base flood elevation to calculate their insurance rate. This could result in significant savings.
|No change in risk level
||No change in insurance rates. However, this is a good time to review your coverage and ensure that your building and contents are adequately protected.
When should you check for flood map changes for your area?
FEMA suggests the following:
- Home/business owners: Make sure to check with your agent at your yearly renewal time or earlier if a map change is announced in your community.
- Insurance agents: At least once a month to stay informed of any changes and how they will affect your customers.
- Realtors: When listing a house or showing a prospective buyer, check to see if map changes may be occurring that could change the level of flood risk on the property of interest.
- Lenders: When issuing or refinancing a mortgage, to determine if flood insurance is, or will be, required.
- Contractors: Before planning construction, to help decide where and how to build.
Discover how the Grandfather Rule and the Preferred Risk Policy Eligibility Extension option can help you save >>
Learn your risk, and find an agent, by taking Your Risk Profile.