“Grandfather” Rule For A Lower Cost Flood Insurance Rating

posted by Judith Ellenthal January 16, 2015

Following recent flood events such as Sandy, the Federal Emergency Management Act (FEMA) has updated the Flood Insurance Risk Maps (FIRMs) that govern flood insurance ratings. Changes to the FIRMs have placed some properties in a Special Flood Hazard Area (SFHA) for the first time. Other changes have increased the Base Flood Elevations (BFE) for properties, placing them in higher risk zones. Some lucky property owners may find that their BFE has decreased, or that the new FIRM has placed their property in a lower risk zone. It is important for effected property owners to be aware of these changes by obtaining a Flood Elevation Certificate to determine how the new FIRM has affected your property.

“Grandfathering” a lower cost flood insurance rating after FIRM changesmay be available for certain properties. In order to take advantage of a lower cost insurance rating, among other requirements, you must have had flood insurance in effect at the time of the FIRM changes, continue to maintain coverage and have been in compliance with the existing FIRM in effect at the time of the initial construction of the property. If the property was substantially damaged or improved, the FIRM date used is the date of the last substantial improvement or damage to the property, not the date of the construction.

As always, there are many requirements to be met in order to determine if the “grandfather” rule for a lower cost flood insurance rating applies to your property. Cacace, Tusch & Santagata can assist you with all your real estate and land use needs, including answering questions related to recent flood zone changes.

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