So we all know that the FEMA FIRM maps were recently changed and many of us living in northern Palm Beach County may have been affected. I’ve spoken before about storm surge and the area around the Loxahatchee River is very susceptible to this. I personally had an interesting turn of events. The new map shows a tiny sliver of land in my front yard in what is now a Flood Zone AE. I called the Village of North Palm Beach and they were very helpful and I was told that literally 3 (yes 3) square feet of my front yard is now in the Flood Zone AE. The maps are compiled based upon survey records and aerial surveys which may not be 100% accurate down to this level so I was preparing to have a topographical survey done so as to request a Letter of Map Amendment or LOMA from FEMA. It appears that according to the lenders that if any portion of your property is inside the flood zone then you are lumped intobeing required to have flood insurance and this is what started to happen to us. My lender sent us a letter stating at first that we were now in a Special Flood Hazard Area, then they sent us a letter stating that since we were now in a SFHA that we would need to prove to them that we have coverage in the correct levels or they would place the policy for us and that would cost, ready for it, $3,707.17
The funny thing is that on the same date that they sent the letter telling us that we needed flood insurance FEMA sent us a letter (Letter F)..
Which states that the rated flood zone is a B and the current flood zone is a B. I looked up what this all means and found this Lenders Guidance Letter on the FEMA site. The RATED FLOOD ZONE is the flood zone on which your current flood policy is based. For myself this is a Zone B. The CURRENT FLOOD ZONE is the flood zone you are currently in ACCORDING TO THE CURRENT FEMA FIRM MAPS. On this same Lenders Guidance Letter it states in part…
“There is no requirement for the lender to investigate or resolve the difference between the “Current Flood Zone” and the “Flood Risk/Rated Zone”.
First, my initial search of the web said that if any portion of a property is (now) shown in a flood zone then the structure is rated for that flood zone. This is what the banks do. The banks use a flood zone determination company to tell them if the property is in a flood zone. If the flood plain touches any portion of your property then these folks add you to the list of those required to obtain flood insurance. The bank then generates a letter with a BIG number quote to force a flood policy on you. They send out the letter that I mentioned above and they are under no obligation to fix anything and they make BIG money in doing all this. This is where the LOMA comes in because the description for same is: “For a LOMA to be issued by FEMA to remove one or more structures from the SFHA, the NFIP regulations require that the lowest adjacent grade (the lowest ground touching the structure) be at or above the BFE.” BFE is the Base Flood Elevation. The Lowest Adjacent Grade is “the lowest point of the ground level immediately next to a building.” It is up to you to pay attention. Read these letters and understand them. I had to send a fax with the FEMA Letter F to my lender. I also submitted it on line to the bank. AND I sent it to my Insurance Agent. YOU CAN REQUEST FEMA TO SEND A LETTER TO YOU WITH THE FLOOD DETERMINATION ON IT FOR A FEE OR $80. Do this as the first item if you do not think your property (remember, the lowest adjacent grade to the insured structure) is located.
A few things to remember. I have flood insurance because I choose to. If I do not speak up then the bank places the property in a flood zone where coverage is required for a conforming loan. This costs myself and any potential property buyer money and adversely affects the property value. Also, if I choose to carry insurance that’s my decision but at some time in the future I may foolishly decide to end coverage. Finally, There’s a big difference in premiums for Zone B properties and Zone AE today and in the future when subsidies are removed and it affects the ability and cost to re-build.