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Insurance Professionals & Lenders: Frequently Asked Questions

what flood zones require flood insurance

This page provides insurance professionals and lenders with answers to the most frequently asked questions on the National Flood Insurance Program (NFIP) and understanding a community's risk to floods as it relates to mandatory flood insurance requirements. This page is intended for insurance professionals and financial lenders.

Insurance Professionals and Lenders

1. What does community participation in the National Flood Insurance Program (NFIP) mean and how does that affect a homeowner?

Communities (i.e. local governments) decide to participate in the NFIP. which enables property owners to purchase insurance protection against losses from flooding. Specifically, communities that agree to manage flood hazard areas by adopting minimum regulatory standards may participate in the NFIP. These standards are listed in Section 60.3 of the NFIP regulations. Section 60.3 and other portions of the NFIP regulations may be accessed through the Guidance Documents and Other Published Resources page on the FEMA Website.

If a community chooses not to participate in the NFIP, property owners in that jurisdiction are not able to purchase federally backed flood insurance. In addition, federal grants, loans, disaster assistance and federal mortgage insurance are unavailable for the acquisition or construction of structures in the floodplain shown on the NFIP maps.

If a community chooses not to participate in the NFIP, property owners are not subject to the federal flood insurance purchase requirements. However, a lender is still required to inspect the effective NFIP flood maps to determine and provide notice of flood hazards and risks. A lender may require a borrower to obtain flood insurance even in the absence of a federal requirement.

2. What are some options a property owner has to potentially remove the flood insurance requirement?

In some cases, a lender determines that a property is in a Special Flood Hazard Area (SFHA) shown on a Flood Insurance Rate Map (FIRM) but the property owner disagrees with that determination. The SFHA is also known as the 100-year floodplain. It is more precisely defined as the floodplain associated with a flood that has a 1-percent-annual chance of being equaled or exceeded in any given year. Therefore the SFHA is not a flood event that happens once in a hundred years, rather a flood event that has a one percent chance of occurring every year. Property owners in this situation have a couple of options. Depending on the specific circumstances, you may apply for a Letter of Determination Review (LODR), a Letter of Map Amendment (LOMA) or a Letter of Map Revision Based on Fill (LOMR-F).

The application forms for LOMAs and LOMR-Fs can be found on the FEMA Forms Webpage and provide comprehensive, step-by-step instructions for requesters to follow, ensuring that your submittal is complete and logically structured. Use of these forms allows FEMA to complete its review quicker and at lower cost to the National

Flood Insurance Program. While completing the forms may seem burdensome, the advantages to you outweigh any inconvenience. The following paragraphs describe first the LOMA or LOMR-F process, followed by the LODR process.

Upon receiving a completed MT-EZ (for LOMAs) or MT-1 (for LOMR-Fs) application, FEMA reviews property-specific information (including surveyed elevation data, typically the elevation of the lowest adjacent grade of the structure in question, provided by a Licensed Land Surveyor Note: the homeowner may be required to hire a land surveyor to perform this elevation survey, if this data is not readily available) and makes a final flood zone determination for the property. Once an application and all necessary data are received, the determination is normally issued within 30 - 60 days. If the LOMA or LOMR-F removes the SFHA designation from the property, it can then be presented to the lender as proof that there is no federal flood insurance requirement for the property. However, even though a LOMA or LOMR-F may waive the federal requirement for flood insurance, a lender retains the prerogative to require flood insurance. No fee is charged for the review of a LOMA; however, there is a review fee for a LOMR-F. Check the flood map-related fees on the Flood Hazard Mapping Website.

Within 45 days following the date your lender notified you that your property is in the SFHA shown on the FIRM for your community, you and your lender may jointly request that FEMA review your lender's determination; FEMA's response to such requests is a LODR. In response to such requests, FEMA reviews the same information your lender used to determine that your structure was located in an SFHA. Unlike with a LOMA or LOMR-F, the elevation of the structure or property relative to the elevation of the 1-percent-annual-chance flood is not considered for a LODR. Just like your lender, FEMA only considers the location of the structure relative to the SFHA boundary shown on the FIRM. FEMA reviews this information and issues its finding of whether the structure is located in the SFHA according to the currently effective FIRM. While this determination cannot consider the elevation of your structure or property, it can be useful if you feel the lender's interpretation of the FIRM is incorrect.

There are obviously some important distinctions between the processes (LODR, LOMA and LOMR-F).

  1. The determinations are based on different data.
The LODR process does not consider the elevation of the structure or property. Rather, it considers only the horizontal location of the structure relative to the SFHA shown on the FIRM. For the LOMA and LOMR-F processes, actual survey elevation data are required to determine if the property or structure is at or above the 1-percent-annual-chance flood elevation.
  1. There are different review and processing fees involved.

Category: Insurance

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