FEMA has been updating community flood maps throughout the nation for several years now through their 2003 Map Modernization (Map Mod) Program. This remapping effort is not only aimed at producing more reliable flood risk data, but FEMA is taking this opportunity to convert the data to a digital format. Through this process, many community maps are revised based on updated studies, more detailed studies, updated topography or newly studied streams. The end result is a revised floodplain, and some properties adjacent to studied streams may be affected by such revisions. In some cases, a property not located within a floodplain prior to the Map Mod effort may now be mapped within a high hazard flood zone. In other cases, properties previously located within a flood zone may be removed due to a more detailed study. In either case, a change in flood hazard mapping on your property not only provides the most recent flooding data for your property, but can significantly affect flood insurance premiums required by your mortgage lender.

It should be important to note that for many properties that we have investigated, whether flood mapping revisions have already been generated through the FEMA Map Mod process or not, FEMA floodplains are often not very accurate on a site-specific level due to inaccuracies resulting from the typical large scale modeling and mapping process used by FEMA to generate flood maps for a large area (entire stream corridors or watersheds). In addition, we have seen on multiple occasions that some locally approved floodplain alterations have never been submitted to FEMA and are therefore not incorporated in the FEMA flood maps. Thus, providing more accurate topography and modeling for a specific site, while more expensive, may result in the removal of the floodplain from a portion of the site as well as result in long term savings of insurance and easier financing or sales of the property.

Properties located within a FEMA flood zone in communities that participate in the FEMA National Flood Insurance Program (NFIP) must pay flood insurance premiums if a federally backed mortgage is secured for the property. Private lenders may also require this. If the Map Mod effort suddenly results in your property being located in a new or expanded flood zone, your lender will likely contact you to discuss an increase in your mortgage payment to account for flood insurance premiums. If the property is refinanced to take advantage of the lower mortgage rates of late, flood insurance premiums will be added to the property insurance as an added expense.

WSSI recently consulted a property management company for a condominium building in Alexandria, a community participating in the FEMA NFIP. The community has had flood insurance maps effective since the 1970s and this particular property has never been included in a mapped floodplain. The community worked with FEMA to update their Flood Insurance Rate Maps (FIRMs) through the Map Mod process. The new maps, which became effective for Alexandria on June 16, 2011, involved newly studied areas which resulted in the drainage system adjacent to the condominium building being mapped with a new high hazard, Zone AE, floodplain. (Similarly, Fairfax County FIRMs were updated and became effective September 17, 2010.) The property management company was informed by the lender that an annual flood insurance premium in the amount of $46,000 was now required due to the high hazard classification. WSSI was asked to investigate ways to reduce the annual insurance premium, including floodproofing options and the possibility of re-studying the system to look for ways to reduce the flood elevation affecting the property. This is actually a common problem associated with the Map Mod process across the country. Many properties that were once outside the mapped flood zone areas were now included in FEMA high hazard floodplains and were required to pay flood insurance premiums.

Because of this situation, FEMA has provisions in place to help affected property owners by allowing them to pay a reduced/preferred premium through either a Preferred Risk Policy (PRP) or a "Grandfathering" rule. Of course, there are requirements that a property must meet in order to be eligible for these options. Unfortunately, local insurance agencies do not always have the background or knowledge to be able to assist property owners with applying for a reduced or preferred premium. For example, WSSI found that the "Grandfathering" rule applied to the previously mentioned condominium building in Alexandria, which the local agent was unaware of. After providing information from a FEMA insurance representative to the local agent, the annual premium was reduced from $46,000 down to about $13,800, a savings of over $32,000 per year. This massive savings was in addition to savings associated with not having to perform other potentially costly work, such as floodproofing or additional engineering studies.

As we have seen, being included or excluded from a flood hazard zone can have a significant affect in insurance premiums and associated preventative maintenance costs. Unfortunately, many property owners do not know if their property is located in a FEMA floodplain or if their community's flood maps have been revised. In addition, insurance agencies are not always aware of certain aspects of FEMA insurance programs, such as the Preferred Risk Policy program or the "Grandfathering" rule, which may assist their clients with realizing potential savings.

If you have questions concerning how a FEMA floodplain is affecting your property and your flood insurance premiums or would like more information concerning the topics in this article, please contact Mike Marsala or Ian Smith.