Flood Maps and Flood Insurance

Flood insurance is a federally underwritten program which helps homeowners, business owners, and renters repair or replace buildings and their contents after a flood. With the release of the new flood hazard maps (known as Flood Insurance Rate Maps, or FIRMs), some property owners will learn their risk is higher or lower than the previous maps indicated.

If you have a loan through a federally regulated or insured lender and are newly identified to be in a high-risk area (flood zones labeled with letters beginning with A), when the new maps become effective the lender will require you to carry flood insurance as a condition of your loan.

The National Flood Insurance Program’s (NFIP’s) new rating methodology (Risk Rating 2.0) does not use flood zones or Base Flood Elevations for rating. So, any changes in Base Flood Elevation or flood zone will not affect your insurance rate. The only exception is if your building is newly identified to be in a high-risk area.  If you have a policy in place within 12 months after the new maps become effective, the NFIP will provide you a one-time Newly Mapped Discount. Then at each renewal, your policy rate will increase no more than 18% a year until it reaches its full-risk rate.

If your building is no longer to be shown to be in a high-risk area and is now in a moderate- or low-risk area, flood insurance is no longer federally required; however, the risk is only reduced, not removed. You are strongly encouraged to maintain coverage as about 30% of flood claims in Arizona occur in these moderate-low risk areas.

If there is no change in flood risk, this is a good time to review your coverages and ensure that your building and contents are adequately insured.

For a more detailed explanation, click here. For more information about flood insurance, visit our Flood Insurance Policies page or www.FloodSmart.gov.