How Does A Special Flood Zone Area Effect Me

New maps (preliminary or effective) show my home now to be located in a Special Flood Hazard Area (SFHA); how does this affect my property and me?

 

When FEMA releases a preliminary Flood Insurance Rate Map (FIRM) and Flood Insurance Study (FIS) report for a community, caution must be exercised in using this data. For insurance purposes, preliminary FIRMs and FIS reports cannot be used to make official flood determinations. The currently effective FIRM is the only official document for this purpose.

However, for regulatory purposes, preliminary FIRMs and FIS reports may be used by the community. Local regulations usually allow for the use of the best available data and, in most instances, the data provided on the preliminary FIRMs is much better than the older data on the currently effective FIRMs. The use of preliminary maps as “best available data” is only allowable when the preliminary data are more conservative than the effective data; i.e. the elevations of the base (1-percent-annual-chance) flood are higher or the SFHA is more extensive. Please contact your community’s floodplain administrator to determine whether preliminary data is being used by your community and whether it has any impact on construction or other use of your property. If the currently effective FIRM shows your property outside the SFHA and the newer preliminary FIRM shows your property as being in the SFHA, you may also want to contact your community floodplain administrator to determine whether your community is planning to appeal the information shown on the preliminary FIRM. If your community is not planning to appeal and you believe the information shown on the preliminary FIRM is incorrect, you may also want to ask the floodplain administrator what you have to do to appeal the information shown on the preliminary FIRM yourself.

If the information shown on the preliminary FIRM will not be appealed, you may want to contact your insurance agent to determine your options for purchasing a flood insurance policy. The flood insurance premium rates for a property that is shown outside the SFHA on the effective FIRM are lower than the rates for a structure inside the SFHA.

If a new FIRM becomes effective for your community and your structure is now in an SFHA and you have federally related financing for your property and have not already purchased a flood insurance policy, your lender is required by law to document the flood zone determination and require that you purchase flood insurance. A 30-day waiting period follows the purchase of a flood insurance policy before it goes into effect. There are exceptions to the 30-day waiting period for policies purchased in connection with the making, increasing, extending or renewing a loan or certain map changes. If you do not purchase the insurance within 45 days after being informed that flood insurance is required, the lender is required to force-place the insurance and charge you for the cost. To dispute the lender’s determination that your property is located in a flood zone, you and your lender can jointly request a Letter of Determination Review (LODR) from FEMA. This request must be submitted within 45 days of the date your lender informs you that your property is in an SFHA, the area subject to inundation by the base (1-percent-annual-chance) flood.

If an Elevation Certificate has been prepared for your structure, you may want to consider, as an alternative to the LODR, submitting the Elevation Certificate and all other required data, in support of an application (MT-EZ) for a Letter of Map Amendment (LOMA) or an application (MT-1) for a Letter of Map Revision Based on Fill (LOMR-F). LOMAs and LOMR-Fs are official determinations from FEMA of a structure’s relationship to the SFHA.

Flood insurance rates are dependent on a number of factors, including the age of the structure, degree of flood risk and other considerations. Please visit FloodSmart.gov for more information about flood insurance rates and to obtain other useful information. In addition, since the inception of the National Flood Insurance Program (NFIP), additional legislation has been enacted to strengthen the program, ensure its fiscal soundness and inform its mapping and insurance rate-setting through expert consultation, reports and studies. Some of these legislative changes impact the cost of flood insurance. Visit the NFIP Reform page on the FEMA website for more information on these changes.

If you do not have federally related financing, you are not required by federal regulations to have flood insurance, although it is available to you if your community participates in the NFIP. You should contact your insurance agent for more information because the purchase of flood insurance is a prudent means of protecting your financial interests.