Map Changes and Flood Insurance

Where new maps show your property now to be at a high flood risk, most mortgage lenders will require flood insurance. The National Flood Insurance Program (NFIP) has a cost-saving rating option to help reduce the financial impact. Where new maps show that your property is no longer at a high risk, flood insurance is no longer federally required by lenders; however, the risk is only reduced, not removed. The good news is that insurance rates will be lower. The maps are first issued in “preliminary” form for public viewing and then in final form 6 to 12 before they become effective. This gives you time to prepare for any change in risk and talk to your insurance agent to learn ways to save on flood insurance.

How Map Changes Affect Flood Insurance

If Maps Show ...	These Requirements, Options, and Savings Apply
Change from moderate to low flood risk (Zones B, C, or X) to high risk (Zones A, AE, AH, AO, V, or VE)	Flood insurance is mandatory. Flood insurance is federally required for most mortgage holders. Insurance costs may rise to reflect the true (or high) risk. The Newly Mapped procedure can offer savings. The Newly Mapped procedure allows policyholders to purchase coverage at the lower-cost Preferred Risk Policy (PRP) rate for the first 12 months after new maps go into effect. After the first year, the rate begins its transition to a full-risk rate with annual rate increases of no more than 18 percent each year. Policyholders not eligible for the Newly Mapped procedure may still benefit from the NFIP’s Grandfather Rule. Eligible policyholders can keep their prior zone or Base Flood Elevation for rating purposes after maps change. Grandfathering applies if the structure was built in compliance with an earlier map or the policyholder has maintained continuous flood coverage.
Change from high flood risk (Zones A, AE, AH, AO, V, or VE) to moderate to low risk (Zone X or Shaded X)	Flood insurance is optional but still recommended. The risk is only reduced, not removed. You can still obtain flood insurance, and at a lower rate. Even though flood insurance isn’t federally required, everyone is financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file more than 20 percent of all NFIP flood insurance claims and receive one-third of Federal disaster assistance for flooding. When it's available, disaster assistance is typically a loan that you must repay with interest. Conversion offers savings. Your insurance agent can easily convert an existing policy to a lower-cost PRP if the building qualifies. Note that lenders always have the option to require flood insurance in these areas.
Change from high flood risk (Zones A or AE) to higher flood risk (Zones V or VE), or increase in the Base Flood Elevation (BFE)	The NFIP’s Grandfather Rule allows policyholders who have built in compliance with the flood map in effect at the time of construction to lock in the earlier BFE or flood zone to calculate their insurance rate in the future. This option could result in significant savings.
No change in risk level	No change in insurance rates. However, this is a good time to review your coverage and ensure that your building and contents are adequately protected.

Learn More about Ways to Save

• Newly Mapped Procedure
• Grandfather Rule
• Conversion