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FEMA NFIP Information on Grandfathering Insurance Rates

The Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program (NFIP) is in the process of finalizing new Flood Insurance Rate Maps (FIRMs) for New Jersey counties.  The FIRMs identify flood zones and base flood elevations, and are used by FEMA to determine flood insurance premiums.  Base flood elevations are the regulatory standards set by FEMA for elevating substantially damaged structures and newly constructed buildings.

Buildings located in high risk flood areas identified in the FIRMs (i.e., A zone and V zone) with mortgages from federally regulated or insured lenders are required to maintain flood insurance.  Flood insurance premiums are based on a number of different factors including the type and amount of coverage being purchased, the flood zone, the design and age of the structure, and the elevation of the building in relation to the base flood elevation.   Generally speaking, structures that are elevated at or above the base flood elevation typically receive lower insurance premiums.   

Moreover, most property owners who have received federal rebuilding assistance while recovering from Sandy or other major disaster events likely are now subject to a federal requirement to obtain and maintain flood insurance on the damaged property for some period of time.  Failure to maintain insurance puts the property owner at risk of being ineligible for future federal assistance should another disaster occur.  

As a result of the forthcoming FEMA FIRMs as well as recent federal legislation impacting how flood insurance premiums are calculated, it is important that residents and business owners who are in, or who may be moved into, the floodplain understand how these changes may impact their flood insurance policies and how they might increase insurance premiums, in some cases significantly.  

To that end, the following FEMA links offer useful information about the NFIP:

Additional information is available on FEMA’s NFIP website.  FEMA encourages property owners with questions about NFIP flood insurance generally, questions about whether they are in, or may be moved into, the floodplain or questions about the anticipated adoption of new FIRMs and other changes in the flood insurance law, to contact FEMA’s Office of the Flood Insurance Advocate.  
Importantly, because FEMA NFIP is a federal program, the Department exercises no regulatory authority or control over NFIP.  The Department therefore cannot advise property owners how best to proceed in the face of the changing landscape of flood insurance. 

The Department on its website has a listing available for those carriers that write private flood insurance.

You may want to compare the rates for these companies with the Federal Program.

Other information on flood insurance can be found in the Department’s Insuring Your Home Brochure

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