As we all most likely know, flood insurance is required on an insurable structure located in a special flood hazard area when there is a government backed loan attached to said structure. Here are a few common questions about the flood insurance requirement.
My surveyor says I am above the flood elevation, so I do not have to get the flood insurance, right?
Incorrect. The flood insurance requirement is based on the current effective FEMA map. If said map shows any portion of the structure touching the boundary of the special flood hazard area, then flood insurance is required. Elevation is actually not taken into account for this determination.
My builder said he made sure the finished floor of the house was above the flood elevation so we are out of danger of flooding and also we do not require flood insurance.
Wrong on both counts. If the FEMA map shows the structure in a special flood hazard area then flood insurance is required, regardless of elevation. Also, the finished floor elevation is irrelevant, the elevation to consider is the lowest adjacent grade elevation (where the lowest part of the house touches the ground). Even if flood water does not get into the house, the foundation can still be negatively affected.
I live on the hill of all hills. If I was to flood we might as well start building an ark.
Again, if the FEMA map shows the structure in or touching a special flood hazard area, flood insurance is mandatory. Can the flood maps be drawn incorrectly? Of course, they are created by humans.
My lender is the one saying I need the flood insurance when obviously I don’t. They are making a commission from the insurance company and it’s not right.
It’s not the lenders fault. They have no choice but to enforce the flood insurance requirement if the FEMA map shows the structure to be in. This is true even if they have seen the structure and also agree that it’s apparent that the map must be wrong. If they do not require flood insurance they are subject to fines and penalties. And the bank cannot earn a commission from making you get flood insurance.
So even if everyone knows the FEMA map is wrong, the structure owner has no recourse? Actually there is a possible solution in many cases. If the structure owner can prove, by way of an elevation certificate performed by a licensed surveyor or engineer, that the lowest adjacent grade (LAG) elevation is at or above the base flood elevation (BFE), they can apply to FEMA for a Letter of Map Amendment (LOMA). Yes, it does cost money to pay a survey or engineer to do this, but FEMA states that the burden of proof is on the structure owner. So it can be the worst drawn map on earth, but they structure owner must prove it to FEMA. The good news is that if the LAG is at or above the BFE it is a relatively easy process. Typically the only cost is to obtain the elevations. FEMA does not charge a fee for the LOMA. It does take about 6 weeks for FEMA to get the letter processed and if a surveyor or engineer is certified to do so, they can perform an eLOMA which can be completed in as little as a day or up to a few days. Once the letter is issued by FEMA, the structure owner must get it to the lender who then has the option of removing the flood insurance requirement. Yes, they do still have the option, but I have never seen one not lift the requirement.
Don’t forget though… some structures are simply in a floodplain even if the owner disagrees. In these cases they must carry the flood insurance and the fact is, they need to. Also, if an owner gets the LOMA and the lender drops the flood insurance requirement, they should seriously consider a very affordable preferred risk policy to be safe.
If you have flood questions you can check out FEMA.gov or even shoot me a message… I was in the flood zone determination industry for 14 years and am a Certified Floodplain Manager (CFM).
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