The potentialities of FEMA’s flood map revamp
In 2009 Congress appropriated $220 million to FEMA for a program called Risk Mapping, Assessment and Planning (Risk MAP), a comprehensive 5-year plan to vastly improve the accuracy and quality of National Flood Insurance Program maps. The plan is designed to bring wider risk mitigation while incorporating risk separation tools and techniques to flood prone areas with maximum focus and effect. The ultimate goal for Risk MAP is to reduce loss of persons and properties in the event of flood or storm surge, particularly in historically flood prone areas.
One other very important goal of this program is to lessen the negative financial impact of floods and storm surge on the U.S. Treasury. It will take time for the implications of these changes to manifest, but make no mistake, we will see limitation on severe flood destruction zone, like on barrier reefs, and increased pricing for homes in flood zones like AE or XE or worse.
The program is causing a realignment of the 50 year, 100 year and 500 year flood zones, and the recent change will curtail the availability of Federal Flood for homes on Cape Hatteras or other barrier reefs for more than one rebuilding.
I expect this trend to not only continue, but accelerate with the following potential outcomes: Federal Flood maps will become more accurate and begin to bifurcate current flood zones, leading to greater accuracy and pricing that will be reflective of the potential frequency of loss.
The maps will eventually be able to develop flood plains for the 10 year flood zone, 25 year flood plain, 50 and 100 year flood plain. And this will further target exposure, pricing and loss more (appropriately) and force more cost out to those with the greatest need.
If you are concerned about the changes and the potential impact they will have on your property, here is what you should:
- Check with your town engineer or broker to learn what zone for flood your home is in.
- If it is an A, B or X, I strongly recommend getting an elevation certificate as this is precise to your home and may provide some mitigation for your Flood Premium.
- If you are in a “High Risk Zone,” flood insurance costs will continue to increase, so consider undertaking investments in 6154 mitigation/practices (i.e. grading of land, sea walls, superior pumping systems, exterior drains, etc.).
For more information on the potential impact of FEMA’s new flood mapping, please feel free to contact WGA’s Private Client Group.
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