This means that the lower premiums can be charged. In some instances, older structures have shown that their property may meet the local floodplain management requirements for new construction. If the policy is purchased after the new flood maps become effective, the higher subsidized premium will be charged. If you can show that you purchased a flood insurance policy prior to the floodplain designation, as long as the coverage is continuous, the policy will be rated based on the structure being outside of the floodplain. If your property was built prior to the local floodplain management requirements, the NFIP subsidizes your premium. If flood insurance purposes, the start of construction or substantial improvement used is the date that a building permit was issued provided the start of construction, repair, reconstruction or improvement was within 180 days of the permit date. Under the NFIP, the date of construction is a major factor used to determine the cost of flood insurance on the property as well as any local floodplain management requirements. What effect does this have on the cost of my flood insurance? I have an older property that was built before any flood maps or local floodplain management regulations existed. The new flood map will show that my property will be in a floodplain. Even if you are not required to purchase flood insurance, we encourage property owners to continue coverage because you may be flooded by an event greater than the 1% annual chance event. You should contact your insurance agent or company to have your policy re-rated using the new maps. If you wish to continue coverage once the new maps take effect, you become eligible for lower rates. If you have Federal or federally related financing for the property in question, you will no longer have a Federal requirement to purchase flood insurance when the new maps take effect however, lenders retain the prerogative to require flood insurance, even for property that is not in a floodplain. Will I have to continue carrying flood insurance when the new map officially takes effect? The new map, however, will show my house as being outside the floodplain. I have flood insurance, and my house is in a floodplain according to the current map. If you do not have Federal or federally related financing, you are not required by Federal regulations to have flood insurance, although it is available to you. If you have insurance before the new maps take effect, the basis for rating that policy remains unchanged (i.e., you can use the zone rating that was charged to you when your property was located outside the floodplain). If you dispute the lender’s determination that you property is located in a floodplain, you and your lender can jointly request a Letter of Determination Review from the Federal Emergency Management Agency (FEMA) within 45 days of being informed by your lender that your property is located in a floodplain. If you do not purchase the insurance within 45 days after being informed that flood insurance is required, the lender is required to place the insurance and charge you for the cost of it. If you have Federal or federally related financing for the property in question and you do not already have flood insurance, your lender may contact you once the new map takes effect and require that you purchase flood insurance. Will I have to purchase flood insurance when the new map officially takes effect? My house is not in a floodplain according to the current map, but the new map will show it as being in a floodplain. For newer structures in floodplains, the elevation of the lowest floor relative to the elevation of the 1% annual chance flood (Base Flood Elevation or BFE) will also be used to rate the policy. Major factors include the amount of coverage purchased, the deductible, the location, age, occupancy and type of building. What factors determine flood insurance premiums?Ī number of factors determine premiums for the National Flood Insurance Program (NFIP) flood insurance coverage.
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