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Historic Maps Make Some Policies More Affordable While the focus of FEMA's Map Modernization Program is to bring Flood Insurance Rate Maps (FIRMs) up to date, another FEMA project is preserving and digitizing no longer effective FIRMs to make them available online. Why would insurance agents, public officials, lenders, or policyholders who may not be history buffs (and probably aren't cartographers) want access to old FEMA maps? Grandfathering. The NFIP's "grandfathering" rules recognize policyholders who built in compliance with the flood map that was in effect at the time of construction as well as those who have maintained continuous coverage. How? When rating an NFIP policy, the insurance agent uses the flood risk information on the FIRM that is in effect on the date the policy is purchased. Even if the FIRM is updated, when this policy is renewed, it still can be rated based on the FIRM that was in effect when the policy was initially rated, as long as flood insurance coverage has been continuous and the building has not been altered in a manner that would remove this benefit (such as adding an enclosure below an elevated building). In many cases, rating a policy based on an older map could considerably reduce a property owner's annual premium. Grandfathering According to the Flood Insurance Manual, grandfathering is: "An exemption based on circumstances previously existing. Under the NFIP, buildings located in Emergency Program communities and Pre-FIRM buildings in the Regular Program are eligible for subsidized flood insurance rates. Post-FIRM buildings in the Regular Program built in compliance with the floodplain management regulations in effect at the start of construction will continue to have favorable rate treatment even though higher base flood elevations or more restrictive, greater risk zone designations result from FIRM revisions." Applying the Grandfathering Rule In general, flood insurance rates for buildings constructed in high-risk zones after the community's first flood map was adopted are based upon the difference between the flood map's Base Flood Elevation (BFE) and the building's elevation. If there has been a change so that using the BFE listed on the FIRM when the structure was built provides a better rate, the policyholder must provide the agent with an Elevation Certificate and a copy of the flood map that was in effect at the time of the building's construction. A letter from a community official verifying this information is also acceptable. The conditions that must be met for new or renewing policies to be eligible for the rating benefit from the Grandfather Rule after a map revision becomes effective are described below. New Insurance Applications Post-FIRM Construction: When a property owner applies for a new policy, the insurance rates can be based on the FIRM zone and the BFE on the old map in effect on the date the building was constructed provided that:
Pre-FIRM Construction: The "built in compliance" rule described above also applies to Pre-FIRM construction if the date of construction was on or before December 31, 1974, and was on or after the FIRM date. Renewal Policies Policies written to cover either Post-FIRM or Pre-FIRM construction may be renewed and rated based on the FIRM and/or BFE in effect when the policy was initially rated as long as the coverage is continuous and the building has not been altered to make the lowest floor for rating lower than the BFE on that FIRM. (NOTE: Alteration does not apply to Pre-FIRM construction or to risks grandfathered to a B, C, or X Zone.) For more information about the NFIP's Grandfathering Rule and how to apply it, see the Rating, Preferred Risk Policy, and Definitions sections of the Flood Insurance Manual (RATE 21-23, PRP 1, DEF 4). Map Modernization and Grandfathering FIRMs must be revised and republished periodically to reflect new or more accurate degrees of risk that result from changes within the floodplain as well as improvements in mapping technology. For example, new development in a community can aggravate flooding and expand the floodplain, necessitating map revision. When communities revise their geographical boundaries, this can result in the designation of additional flood hazard areas which must be identified on the community's FIRM(s). Communities occasionally will make structural improvements such as dams and levees to reduce the potential effects of flooding. Flood control systems such as these (and the reduced flood risk they represent) must be reflected on FIRMs. In addition, as communities provide FEMA with new information that better delineates the BFE in high-risk flood zones, this information must also appear on the appropriate FIRMs. FEMA's Grandfathering Rule is particularly important in the context of map modernization. For example, if a building is located in a B, C, or X Zone that soon will be remapped and is likely to become a Special Flood Hazard Area, the property owner could purchase the policy before the new flood maps are adopted and keep the lower X-Zone rate, even after the new flood maps become effective. In a scenario in which a moderate-risk zone is revised into a high-risk zone, property owners eligible for the Grandfathering Rule may even qualify for the NFIP's lower-cost Preferred Risk Policy for the first year, and receive building and contents coverage at significant savings. This rating option is not just available to the current policyholder, but will also benefit the next owner, as the policy may be transferred to the new property owner at the time of sale. The NFIP's General Rating Rule is to always use the new map if it will provide a more favorable premium (lower rate). However, if a map revision would result in a higher premium rate, using the grandfathered map would represent a cost savings to the policyholder. Increased Interest in Historic FIRMs FEMA's Map Modernization Program is half-way through its implementation. As of December 31, 2006, 47.8 percent of the population had new preliminary countywide digitally-converted FIRMs (DFIRMs). Almost half of these have been adopted by the communities. The window between map revision and map adoption is an important one for insurance agents who sell NFIP policies. As the historic maps become available online, agents may be able to offer lower premiums for some of their customers before updated maps are adopted by their community. By June 2006, FEMA had finished scanning obsolete map negatives, sorting historic microfiche for digitization, and digitizing historic FIRMs. Starting in January 2007, FEMA's Map Service Center (MSC) began posting historic FIRMs to its website. Most states are currently available for free viewing, limited FIRMette creation, or purchasing. Paper copies of these maps are not available from the MSC. Historic FIRMs can be purchased as a CD or downloaded for the same fee as current digital FIRM products. As of April 1, 2007, historical FIRMs for the remaining states will be available on the MSC website. |
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Last updated on April 1, 2007
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