How Flood Insurance Is Affected By Map Changes

Potential Impacts of Map Changes on Flood Insurance and Options

When new flood maps are released, residents and business owners may find that their flood risk is higher or lower than previously thought; others may see no change. And some may now be required to carry flood insurance, while others will no longer be required.  Once you have identified how your flood risk has changed, it is important to then know how it may affect the requirement and cost of flood insurance.  Below are different scenarios which may occur and what options there are to reduce any financial impact.

From Moderate to High Flood Risk

Residents and business owners that are newly identified to be in a high-risk flood area will be required by most lenders to carry flood insurance. The NFIP offers a cost-saving flood insurance rating option called the Newly Mapped Procedure.  

With this option, property owners who buy a policy within the first 12 months after a new map becomes effective are eligible for the lower-cost Preferred Risk Policy (PRP). Rates will then go up no more than 18% each year until they reach a standard Zone X rate or the rate based on the new flood map, whichever is cheaper.

From High Flood Risk to Higher Flood Risk

When a property’s flood risk is increasing due to the Base Flood Elevation (BFE)* increasing, the NFIP offers a cost-saving flood insurance rating option know as "Grandfathering." Grandfathering allows property owners to “lock in” the lower risk BFE for future rating.

The NFIP grandfathering rules allow policyholders who have a policy in effect before the new maps become effective or have built in compliance with the flood map in effect at the time of construction to keep their previous BFE to calculate their insurance rate. This can result in significant savings.                                                                                                                                                                                                                             *Base Flood Elevation is the elevation flood waters will reach or exceed in a 1-percent annual chance flood

From High Flood Risk to Moderate Flood Risk

When a property’s flood risk is changing from a high-risk area (Zone A) to a moderate- or low-risk area (Zone X), the federal requirement to carry flood insurance by lenders is removed; however, the flood risk is not…it is just reduced.  More than 30% of NFIP flood claims in Arizona are from policyholders in Zone X.  

The reduction in flood risk typically means flood insurance is now cheaper.  Residents and business owners are strongly encouraged to ask their insurance agent when the maps become effective to convert their more expensive high-risk policy to the lower-cost Preferred Risk Policy and maintain coverage. No additional money is needed upfront, and they will get a refund for the difference in cost. 

No Change in Flood Risk

While map changes do affect some property owners, many residents and business owners are not affected by the map change.  However, this is a good time to review your flood insurance coverages with your insurance agent, as most homeowners policies do NOT cover damage due to flooding.  And with the new maps, your property may now be closer to a high-risk area than before.  More than 30% of NFIP flood claims in Arizona are from policyholders in Zone X.

If you have a flood insurance policy, talk with your insurance agent to see if you are fully insured to receive replacement cost for your home and that you have contents coverage.  And if you don’t have flood insurance, you may qualify for the lower-cost Preferred Risk Policy, which automatically includes contents coverage.

Effects of Map Changes on Flood Insurance

Effects of Map Changes on Flood Insurance Opens in new windowClick on the presentation icon to the left to watch a video & hear about how map changes can impact flood insurance.  

How Much could a Flood Cost You?

How Much Could a Flood Cost You Opens in new windowUse the tool to the left to see just how costly even a few inches of water can be. Flood Insurance helps homeowners to recover faster and more fully.

Additional Resources

Below are additional resources about flood insurance.  For more information about flood insurance, visit www.FloodSmart.gov or call your insurance agent.

NFIP Summary of Coverage Opens in new windowNFIP Map Changes and Flood Insurance Opens in new windowNFIP Why Do I Need Flood Insurance Opens in new windowpreferred-risk-policy-homeowners-renters_fact-sheet_jul20