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National Flood Insurance Program Q&A 2


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.  Clinton County had recently updated its Flood Insurance Rate Maps and has an effective date of May 3, 2011.

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 a SFHA, the area subject to inundation by the base (1-percent-annual-chance) flood.

If your structure was built before the effective date of your community's first FIRM (pre-FIRM), your structure's flood insurance policy will be rated using "subsidized" rates that are, for the most part, significantly less than actuarial rates that fully reflect their risk of flooding. If your structure was instead built after the first FIRM (post-FIRM), the policy will be rated based on a building's risk of flooding, or are considered actuarial. In those zones where Base Flood Elevations (BFEs) have been established, Post-FIRM Rates are determined based on the elevation of the lowest floor (including basement) of the building in relation to the BFE. In zones where BFEs have not been established, i.e., referred to as A zones or approximate zones, the rates may be based on an accepted locally determined BFE and can be comparable to zones with BFEs, or may be determined by the height of the building above its highest adjacent grade. Contact your local insurance agent for more information.

Elevation Certificates are required to rate most post-FIRM buildings. If an Elevation Certificate is 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.

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 National Flood Insurance Program. You should contact your insurance agent for more information because the purchase of flood insurance is a prudent means of protecting your financial interests.