Information for Property Owners
*Please refer to the glossary if there are terms you are unfamiliar with.
Who Flood Insurance Reforms Will Affect Most
The flood insurance reforms from the Biggert-Waters and Grimm-Waters Acts will affect subsidized policyholders the most. This is a relatively small percentage of policyholders nationwide and in Virginia (subsidized policyholders make up about 20% of policyholders nationwide and about 15% in Virginia). To see how your community will be affected compared with others in Virginia, click here.
Find out if your property is subsidized. This will let you know if your property will be subject to the large rate increases put in place by the reforms. If your structure is subsidized, you have been paying flood insurance rates that are likely well below your true actuarial risk (reflected by your property's risk of flooding), and your rates may substantially increase as a result of the reforms. If your structure is relatively new, it is probably not subsidized.
Your property is subsidized if it meets all of the following criteria:
It is located in an A- or V-zone, known as the Special Flood Hazard Area.
It was built before the first Flood Insurance Rate Maps became effective in your community (known as a “pre-FIRM” structure), meaning flood insurance and associated regulations were not applicable at the time of construction.
To find out when this cutoff date is for your community, talk to your insurance agent or community floodplain manager or click here. (Look at the “Init FIRM Identified” column, but note that these dates are not always accurate.)
You may also be able to find out if your property is pre-FIRM by looking at your flood insurance policy, which will identify whether you have pre-FIRM construction.
It has not undergone substantial structural changes that caused the structure to be brought up to code. “Substantial structural changes” are any damages or improvements (such as an addition) equaling or exceeding 50% of the market value of the structure. If your structure was substantially changed after your community joined the NFIP, then your subsidy was removed when you brought the structure up to floodplain building codes required by local floodplain regulations. Depending on when this happened, your structure may still be grandfathered. If your structure has undergone substantial changes, it is not likely that you will be largely affected by rate increases from Biggert-Waters.
What You Can Do
Read Grimm-Waters Basics to familiarize yourself with coming changes.
Get an Elevation Certificate if you do not already have one and your property is located in the Special Flood Hazard Area (zones A and V). You may also want to get an elevation certificate if you feel that your land is high enough that it should be in a lower risk flood zone or should be removed from the Special Flood Hazard Area. An elevation certificate will ensure that you are charged an accurate and fair flood insurance premium. See below for more information.
Be aware of substantial structural changes. If your property is improved or damaged more than 50% of the market value, you will be required to come up to floodplain-relevant building codes and may experience rate increases if the property is subsidized. Click here for more information on substantial structural changes.
Look into small fixes, such as flood vents. These may save you thousands of dollars over time. Talk to your flood insurance agent or your community floodplain manager to assess what small fixes might help save you money.
Consider elevating if your structure is low to the ground and located in zones A or V. Elevating is a costly up-front investment, but could save you thousands of dollars a year. It will also make your structure safer, less prone to flooding, and you will have a lower likelihood of suffering damage or losing your belongings to a flood. Upon raising your home, you may qualify for a lower flood insurance rate than you were previously paying.
Talk to your community floodplain manager about FEMA hazard mitigation grants for elevation and acquisition if your property is located in the Special Flood Hazard Area. The total pool of money available for these projects is limited, and there is already a waiting list in many communities. However, if a project is at a high risk of being damaged by a flood, it is more likely that FEMA will step in. Generally, elevation projects that will cost less than $175,000 are deemed acceptable and acquisition projects (where a structure is purchased at market value, demolished, and the property returned to open space) that will cost less than $276,000 are deemed acceptable. For more information, click here and talk to your community floodplain manager.
Substantial Structural Changes
If your property is located in a floodplain, substantial structural changes in the form of damages or improvements can affect your flood insurance rates and whether you are required to bring the structure up to code. “Damages” are any structural damage caused by an event like a storm or fire. “Improvements” are any changes that the property owner makes to improve or expand the structure, such as putting on an addition.
If your structure suffers damage or you make improvements worth 50% or more of the structure’s market value, you will be required to bring your structure up to codes required by local floodplain regulations and the building code. In A- and V-zones, this means you will likely have to elevate your structure above the base flood elevation determined by expected flood heights, displayed on your flood map. You may also have to elevate your heating, ventilation, and air conditioning (HVAC) utilities above base flood elevation. While this may present a substantial up-front cost to you, it will make your structure safer, more resilient to future storms and damage, and it may drastically lower your flood insurance premiums (perhaps by many thousands of dollars).
Further, if your structure is damaged or improve 50% or more of the fair market value and your structure received a subsidized flood insurance rate, your rates will increase by 25% annually until actuarial rates are met. Click here to learn more about subsidies.
Some localities calculate these percentages on a cumulative basis over a number of years, so check with your building official or floodplain manager to find out how the process works in your locality.
In some instances after a structure has incurred flood-related damage, FEMA grant money is available for NFIP policyholders to assist with these increased costs of compliance. For more information, talk to your local floodplain manager or click here for more information from FEMA. Also see these FEMA fact sheets: Increased Cost of Compliance Coverage and Increased Cost of Compliance Coverage: Building Smarter and Safer.
Talk to your local building official to get more detail and locality-specific information about building code requirements.
If your property is located in an A- or V-zone and you have been paying subsidized rates, you will need an elevation certificate to determine your actual flood risk and ensure that FEMA charges you fairly and, if applicable, accurately as your subsidies are phased out. It is expected that in the near future, every policyholder in A- and V-zones will be required to obtain an elevation certificate. If the land that your structure sits on is high, an elevation certificate can also help you prove that your land is high enough that it should be classified as a lower-risk flood zone, which will lower your flood insurance rates.
An elevation certificate determines the elevation of your structure (the lowest floor) in relation to the base flood elevation, the benchmark expected flood height used on Flood Insurance Rate Maps (see the glossary for more information). If your lowest floor is a basement below ground, you are likely below base flood elevation and your rates are likely to be high. If your lowest floor is elevated above base flood elevation, your rates will be low.
To illustrate, see this FEMA graphic showing the relationship between a structure’s elevation and its annual premium (from Homeowner’s Guide To Elevation Certificates):
Without an elevation certificate, you may pay more than you actually owe. Therefore, obtaining an elevation certificate is very important. It may also help your community earn a discount on flood insurance for all policyholders (see information about the Community Rating System here).
For a blank, fillable NFIP elevation certificate and instructions from FEMA, click here.
Talk to your community floodplain manager or building official to find out if your locality has up-to-date information on the elevation of your structure. If not, talk to your insurance agent or your community floodplain manager for help on how to get an elevation certificate. Some will offer recommendations on the best surveyors to hire.
If you are purchasing a new home, consider asking for an elevation certificate as part of the property survey. Combining the elevation certificate with the property survey may save money and will allow for you to ensure you are receiving an accurate flood insurance rate.
Obtaining an elevation certificate will cost at least $300 in most cases, and up to $2,000 in some cases. However, it is necessary to obtain this document to ensure that your flood insurance rates are accurate and not over-priced. Having this document on file can also help your community earn a flood insurance rate discount for you and other policyholders in your community.