Flood Maps Changing: Know Your Options
Updated digital flood hazard maps (DFIRMs) may bring changes in flood insurance requirements for property owners. It is important for insurance professionals to learn how their clients will be affected by the new maps and what the best options are.
Santa Cruz County Flood Control District has prepared a Fact Sheet about what insurance professionals need to know and provides highlights below. Additional fact sheets and tips are available on the Resources page.
Mapped to a Higher Risk: The Grandfathering Option
When properties are mapped into a high-risk area, flood insurance will be required for most mortgage holders. Before new the new DFIRMs go into effect, insurance agents and brokers should compare the 2 sets of maps (the current effective map and the new preliminary map) to see if any clients will be affected and should therefore be alerted to the upcoming change.
Base Flood Elevation Increase
If a building is going to be mapped into a high-risk zone or if the Base Flood Elevation (BFE) is increasing, encourage the owner to purchase (or maintain) a policy now. That way the owner is protected now, and can “grandfather” or lock in that zone or elevation to maintain eligibility for the corresponding insurance rate when the map changes.
Built Before 1st Flood Map Issued
For homes built before the community’s first flood map was issued (known as Pre-FIRM buildings), purchasing a flood policy before the new maps become effective is the only way to lock using rates associated with the earlier zone. Note, however, that sometimes the new maps may actually provide for a better premium than through grandfathering.
Mapped to a Low - Moderate Risk Convert to a PRP
If properties are being mapped out of a high-risk area, the policies may be eligible for conversion to Preferred Risk Policies (PRP) when the new map becomes effective. The owner will receive a refund for the difference in the premium paid between the standard rated policy in the high-risk zone and the new PRP, while remaining covered. More information on conversion can be found on the NFIP Conversion Fact Sheet.
Insurance agents and brokers should remember that they must always rate flood insurance policies using information from the Flood Insurance Rate Map currently in effect, not from the preliminary flood map.
New Vertical Datum
As part of the nationwide Map Modernization effort, the new DFIRMs are using a new vertical datum as the base for all elevations (NAVD88). This datum is a much more accurate one than the almost 80-year old one used for the previous flood maps (NGVD29). As a result, a building’s base flood elevation could show one measurement on the old map (e.g., 75’) and another measurement on the new map (e.g., 78’) though its actual elevation will not have changed.
So, before grandfathering a property where elevation is involved, make sure that the elevation on the elevation certificate and the BFE on the FIRM are both using the same vertical datum. If not, there are conversion factors that can be obtained from the Santa Cruz Flood Control District.