Saturday, January 29, 2022

How The New Flood Insurance Rate Map Changes May Affect Your Flood Insurance Premiums

By Bob Devlin
Floodplain Coordinator, CFM, City of Marco Island, FL

In August representatives from the Federal Emergency Management Agency (FEMA) and staff from Collier County and the cities of Naples, Marco Island, and Everglades conducted a series of community meetings to discuss the proposed new Digitized Flood Insurance Rate Maps (DFIRMS). The purpose of the meetings was to provide property owners an opportunity to learn how their property would be impacted by the proposed map, answer their questions with regard to flood insurance requirements, and learn about the timeline for implementing the DFIRMS.

When the restudy flood maps are issued, your flood risk may become higher or lower which can affect what you pay for flood insurance. If the required elevation at your property is lowered you may be eligible for a flood insurance premium reduction. If the required elevation is raised you will not be impacted as long you maintain your policy. In the meantime, there is a twelve to fifteen month period before the new “restudy” maps become effective with a target date of November of 2011. In the meantime, Marco Island property owners will have adequate time to learn about the new elevations and flood zones, protect their property by purchasing flood insurance, and possibly save on flood insurance premiums.

Flood insurance is mandatory in the Special Flood Hazard Area. Due to risk from storm surge and heavy rains, every federally backed mortgage on homes and commercial buildings located in a Special Flood Hazard Area (SFHA) is required to maintain flood insurance coverage. The SFHA is defined as land areas that are at high risk for flooding. Most of Marco Island is in the SFHA except for portions of the hill section of the estates and other isolated areas. Remember that flood insurance premiums are based on risk. The elevation of your home, it’s location in the SFHA, and compliance with the City’s code of ordinances have an impact on what you pay for flood insurance. A FEMA approved Elevation Certificate is used to verifies the elevation data of a building on a given property relative to the ground level and to determine the proper insurance premium rate for your home or commercial building. A copy of an elevation certificate may be available at City Hall (239-389-5023) if your home was permitted after October 1, 1998. For buildings permitted prior to that date call Collier County Community Development at (239-252-2326). Elevation Certificates may also be obtained from a land surveyor, architect or engineer.

Flood insurance is not always mandatory. If your property is outside the Special Flood Hazard area or is not encumbered by a mortgage, flood insurance is optional but recommended. The risk has only been reduced, not removed. Flood insurance can still be obtained at lower rates. Statistics show that about 25 percent of all flood insurance claims come from moderate-to-low-risk areas. (Exception – The Code of Federal Regulations 44-CFR provides for lending institutions to make flood insurance mandatory to protect their investment).

“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). When purchasing a home you may also want to consider asking about assuming the homeowner’s existing flood insurance policy.

Changes from Zone X to AE. When a property is located in a Zone X, flood insurance is not required but available. However, if the zone changed via a restudy from Zone X to an AE flood zone, insurance will be required when the new flood map becomes effective. To get the lowest flood insurance premium, it is recommend that property owners purchase flood insurance prior to the map change and the policy would be grandfathered to Zone X where premiums are generally lower.

Keep in mind that reducing the home contents coverage can also reduce flood policy premiums.

There can be significant premium reductions (subject to other risk considerations) for changes in the base flood elevation. The following example may be helpful to property owners to further understand how some of the proposed changes in the flood maps may impact them. Keep in mind that the following estimates are based on a single story home that has an elevation certificate which is in compliance with the current flood maps and the proposed flood map elevation is lower (no basement and not an elevated building).

AE Flood Zone Insurance where a single story home is insured for to the maximum flood limits. ($250,000, Contents for $100,000 and $1,000 deductible).

Example 1- if the reference level of the home is the same as the flood map elevation. Flood insurance premiums would typically be $1,301 per year.

Example 2 – if the reference level of the home of the home is at level +1 (1 foot) above the required Flood Insurance Rate Map elevation (FIRM) the estimated annual premium would be $721 per year.

Example 3 – if the reference level of the home is at level +2 (2 foot) above the required Flood Insurance Rate Map elevation the estimated annual premium would be $515.

Be sure to consult with your insurance representative regarding your specific property.

When should you check for flood map changes for your area?

  • 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: 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.

For questions regarding the location of your property in the Special Flood Hazard Area, residents are encouraged to contact Bob Devlin, Floodplain Coordinator at 239-389-5023 or view the City’s current and proposed flood insurance rate map the City’s website in the Hot Topics section or at: before the proposed flood insurance rate maps become effective in November of 2011.

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