The Federal Emergency Management Agency is in the midst of a multi-year initiative to update flood zone maps in more than 20,000 communities nationwide. Current maps need updating to more accurately reflect the risk of flooding. Flood hazards change over time and maps in some areas are based on decades old data. As a result, many will see their current flood insurance premium rates increase sharply. Others will be notified by mortgage lenders that under their new flood zone map, they are now required to purchase and maintain flood insurance.
The good news is that it’s possible to lock in the lower premium by using the current flood map even after the updated map goes into effect. However, to take advantage of the National Flood Insurance Program’s grandfathering options, you will most likely need to act BEFORE the updated flood zone map becomes effective.
Continuous Coverage Grandfathering. To qualify for this option, you must purchase and maintain flood insurance coverage before the new map goes into effect. If you do, your premium will be calculated using the pre-update flood zone or Base Flood Elevation (BFE) even after the updated map becomes effective. Your grandfathered rate is locked in for as long you maintain continuous flood insurance on the property. It can even be transferred to the new owner if your property is sold.
By taking advantage of the continuous coverage grandfathering option, you can save hundreds if not thousands of dollars per year for as long as you own the property. But remember, once an updated map becomes effective, the continuous coverage grandfathering option disappears forever. However, the NFIP offers another option for those who fail to secure flood insurance prior to the updated map’s effective date. Unfortunately, it’s not available to everyone and is significantly more complicated and burdensome than the continuous coverage grandfathering option.
Built-In-Compliance Grandfathering. To qualify for this option, you must provide documentation showing that the property was built in compliance with the flood map in effect at the time of construction and that the property has not been substantially improved. You are not eligible for built-in-compliance grandfathering if your property was constructed before your community’s first flood zone map went into effect.
FEMA’s flood zone remapping initiative is expected to continue for years. If the process hasn’t already started in your community, it may just be a matter of time. If your property is at risk of being remapped into a higher risk flood zone, there may not be much time left to lock in your grandfathered flood insurance rates. Otherwise, you may miss the chance enjoy substantial savings for years or decades to come.
Please contact us if you would like more information about the National Flood Insurance Program’s grandfathered premium options or are interested in obtaining flood insurance.