Flood insurance premiums for pre-FIRM structures are subsidized, resulting in the same cost regardless of the flood risk.
Flood insurance premiums for post-FIRM structures are actuarially rated, resulting in increasing premiums with increasing flood risk.
Flood Insurance Basics
Congress created the National Flood Insurance Program (NFIP) in 1968 in order to alleviate the financial burden caused by flooding across the United States. Federally-backed flood insurance is made available to homeowners, business owners, and renters in participating communities. If a flood event is not Presidentially-declared, federal disaster assistance will not be available to citizens affected. Also, most homeowners' policies do not cover flooding. Therefore, flood insurance may be a practical alternative to help citizens recover from losses due to flooding.
Residents who live in high-risk areas, called Special Flood Hazard Areas (SFHAs), are required to purchase flood insurance if they have a mortgage from a federally-backed lender. This insurance must be carried for the life of that loan as well. However, citizens should be aware that approximately 30 percent of flood insurance claims are in areas outside of SFHAs. People who own or rent residential and/or non-residendtial structures that are at some risk of flooding may want to consider purchasing flood insurance. In fact, people with buildings outside of the SFHAs may be eligible for lower cost policies, called Preferred Risk Policies. Everyone should understand their flood risk so they can make informed decisions about purchasing flood insurance.
Flood insurance is sold by approximately 90 private insurance companies in more than 20,000 communities throughout the nation. If a consumer wants to purchase a policy, they should contact their insurance agent. If they need to find an agent in or near their community, they can visit www.floodsmart.gov.
Flood insurance rating is dependent on the date the structure was built. A "Pre-FIRM" date means the structure was built prior to the community's initial Flood Insurance Rate Map (i.e., prior to the identification of the community's flood risk). Pre-FIRM structures qualify for subsidized flood insurance rates, as shown below. A "Post-FIRM" date means the structure was built after the community's initial Flood Insurance Rate Map, and this results in a risk-based insurance rating. This type of rating is primarily based on the difference between the structure's lowest floor elevation and the 1%-annual-chance flood elevation at that site, as shown below.
Group Flood Insurance Policy
Three flood events in the last 19 months have resulted in 17 Ohio counties being declared Presidential disaster areas. Several Ohio communities that were impacted by these floods are watching the flood water rise again this week. Homeowners that have received Individuals and Household Program (IHP) assistance from FEMA in the past three years may have a special kind of flood insurance policy referred to as a "Group" Flood Insurance Policy. Group Flood Insurance is issued by the National Flood Insurance Program (NFIP) in response to a Presidential disaster declaration and made available to disaster assistance applicants in exchange for a modest premium. Group Flood Insurance policyholders receive a minimum amount of building and/or contents flood insurance coverage for a 3-year period.
The Group Flood Insurance Policy was established by FEMA to help people that receive IHP grants, and live in Special Flood Hazard Areas, meet the requirement to have and maintain flood insurance. Near the end of the 3-year Group Flood Insurance policy term, policyholders are notified that they must purchase and maintain a Standard Flood Insurance Policy or they will not be eligible for future disaster assistance. Increased coverage amounts for buildings and contents are available through the Standard Flood Insurance Policy.
There are over 700 communities that participate in the NFIP in Ohio. Homeowners and renters in these participating communities can purchase a Standard Flood Insurance Policy, regardless of whether they in a Special Flood Hazard Area. If you have questions about flood insurance, or need to file a Group Flood Insurance Policy claim, call the NFIP at 1-800-638-6620.
When FEMA issues a new map to a community, many citizens question how the map changes affect them. In order to recognize policyholders who have maintained continuous flood insurance coverage and/or who have built in compliance with the prior FIRM, the Federal Insurance and Mitigation Administration instituted grandfather rules. Listed below are the rules as they pertain to Pre-FIRM and Post-FIRM structures taken from FEMA's "NFIP Map & Zone Grandfather Rules." You may download this brochure here.
Pre-FIRM (construction prior to the date of the community's initial FIRM)
1) If a policy was obtained prior to the effective date of a map change, the policyholder is eligible to maintain the the premium from the prior zone and base flood elevation as long as continuous coverage is maintained. The policy can be assigned to a new owner at the option of the policyholder.
2) If a building is Pre-FIRM and a policy was not obtained prior to the effective date of a map change, the applicant is always eligible to receive the Pre-FIRM subsidized rates based on the new map.
Post-FIRM (construction on or after the date of the community's initial FIRM)
1) If a policy was obtained prior to the effective date of a map change, the policyholder is eligible to maintain the prior zone and base flood elevation as long as continuous coverage is maintained. The policy can be assigned to a new owner at the option of the policyholder.
2) If a building was constructed in compliance with a specific FIRM, the owner is always eligible to obtain a policy using the zone and base flood elevation from that FIRM, provided that proof is submitted to the insurance company. If the structure was located in flood zone B, C, or X at the original time of construction, proof should include either the FIRM used at the date of construction, or a letter from a community official stating the structure was built in compliance with the local flood damage reduction regulations. If the structure was not located in flood zone B, C, or X at the original time of construction and it was built in compliance, proof should include an Elevation Certificate, the FIRM showing the old base flood elevation, or a letter from the community verifying compliance. Continuous coverage is not required.
Flood Insurance Resources
For more information concerning Flood Insurance Resources, please see the insurance section of the References page.