Grandfather Rules Can Lower Flood Insurance Rates
Release Date: January 23, 2008
Release Number: 1604-621a
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PEARL, Miss. -- A break may be in store for property owners who have maintained their flood insurance with the National Flood Insurance program (NFIP).
The Federal Insurance and Mitigation Administration recognizes policyholders who have maintained continuous coverage or have built in compliance with the Flood Insurance Rate Maps (FIRMs) - or who have done both - with grandfather rules that lower flood insurance rates.
It works like this:
If a policy was obtained prior to the effective date of a community's initial FIRM or before a flood map change, the policy holder is eligible to have a flood insurance policy rated using the prior zone and base flood elevation, as long as continuous coverage is maintained. Proof of coverage must be submitted to the insurance company. The flood insurance policy can be assigned to a new owner at the option of the policyholder when the structure is sold.
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. Proof of compliance includes documentation that the lowest floor level hasn't changed since it was built, and the building hasn't been substantially improved.
If grandfather rules don't apply, the NFIP provides other cost-cutting opportunities. Owners of older buildings in Special Flood Hazard Areas who have not had flood insurance coverage may have more rating options open to them if they purchase a flood policy before a revised FIRM becomes effective.
Property owners in the market for flood insurance should contact an insurance agent for specifics on eligibility and cost. For those who want to buy flood insurance as part of being prepared for hurricane season - which begins in June - they need to keep in mind that there is usually a 30-day waiting period after a policy is purchased before it becomes effective.
For additional, general information about flood insurance, including how to find an insurance agent, visit
www.floodsmart.gov
.
FEMA coordinates the federal government's role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terror.
 
