March 3, 2016
Newly Mapped Flood Insurance
What is the newly mapped flood insurance program from FEMA? How do I qualify for the newly mapped program?
To Begin:
Flood Insurance on the face of it, can be the simplest form of insurance. However, once you get into the details it can quickly become extremely complicated. The primary reason for this is all of the federal rules. When you put politicians together with underwriters you can get quite a mess. However, we must play by the Flood Insurance rules as they are set up. Most Flood Insurance in this country is underwritten by FEMA.. This department sits within the Department of Homeland Security. Therefore most flood insurance is essentially underwritten by the US Federal Government.
Map Changes:
For probably around a decade or so FEMA has sought to update its’ map sets. In Marin County some of the maps started becoming changed in 2009. Some of the locations on the map were changed from a less dangerous flood zone to a more dangerous zone. I believe some were changed from a more dangerous flood zone to a less dangerous one. Why did this happen? I am not a scientist, but it would appear to be a number of factors: Man Made changes to water runoff, Weather pattern changes, and even global warming. I am certain I will receive an email from a geologist with more reasons. Some of it may have been due to the fact that possibly mapping technology is more accurate today than 80 years ago. Another reason could have been fixing a poor earlier decision. Some lands have settled. None the less some aspects of the flood maps may have changed. And these changes may have affected you.
Changes to your Flood Designation and your Insurance Costs / Newly Mapped Flood Insurance:
If your home was newly mapped into the high special flood zone, than you may qualify for a special pricing model. According to FEMA: “Following a map revision, the owner of a building newly mapped into an SFHA (Speical Flood Hazard Area) will be rated according to a new procedure for newly mapped properties.” It continues “This rate will be equal to the PRP rate, but with a higher Reserve Fund Assessment and Federal Policy Fee, for the first 12 months following the map revision….” There are many further details to qualify for this program. As I state at the end of the blog post, I will be more than happy to forward along a copy of the Department of Homeland Security document to you.
Rating for the Year After the Initial:
Your rate for the newly mapped flood program will likely be the lowest the initial year and will increase from there. FEMA says: “After the introductory year, the rate will begin its transition to a full-risk rate with annual rate increases of no more than 18 percent each year.” So basically it will go up to full rate risk by increasing some each and every year.
What Does All of this Mean?
For owners of homes that are eligible for newly mapped flood insurance it means a more cost effective way to initially purchase federal flood insurance. However, it would seem that the rates will go up. In general Newly Mapped Flood Insurance is less expensive than non grandfathered, non special rate federal flood insurance. If you have the opportunity to grab it, I probably would.
Follow Up:
If you email me, I can provide the FEMA guideline document on this program. Should you have any further questions about this NFIP limited time program, please feel free to contact me. I can also provide a flood quote for the state of California.
Further Reading: All About Flood Insurance
Please read my disclosures. Reading about insurance online is no replacement for speaking with a licensed insurance agent in your state or jurisdiction. This blog post deals with a form of insurance specific to the United States of America. Many rules and regulations govern flood insurance and there is no guarantee of coverage. The rules of federal flood insurance are created, managed, and reviewed by the Federal Emergency Management Agency (FEMA.) FEMA sits under the Department of Homeland Security. There are many special insurance facts about federal flood insurance.
Marindependent Insurance Services LLC – Marindependent is regulated by the California Department of Insurance, License Number 0K10734.
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