Why every Insurance Appraisal should contain the Flood Map Information

In CAM Library, Florida Hurricane Insurance, Insurance Appraisal by Patricia Staebler

Flood Maps are issued and maintained by FEMA, therefore let us see first what FEMA is all about and why this agency regulates flood zone maps:

The Federal Emergency Management Agency (FEMA) is an agency of the United States Department of Homeland Security, initially created by Presidential Order on April 1, 1979. The primary purpose of FEMA is to coordinate disaster response throughout the United States, which overwhelms local and state authorities.

The National Flood Insurance Program (NFIP) was created by Congress in 1968 through the National Flood Insurance Act. This program enables property owners in participating communities to purchase insurance protection from the government against losses from flooding. Participation in the NFIP is based on an agreement between local communities and the federal government which states that if a community will adopt and enforce floodplain management and ordinance to reduce future flood risk, the federal government will make flood insurance available within this community. For this purpose Flood Insurance Rate Maps (FIRMs) were created. FEMA manages the NFIP and oversees the floodplain management and mapping components of the program.
Okay, now we know what FEMA and NFIP are all about, but still, why should an insurance appraisal contain a flood map?

The flood maps provide a flood zone designation for every address in the State of Florida. Go to FEMA’s website and try for yourself.

The flood zone designation tells the appraiser, and more important, the insurance agent, how to rate the subject property in terms of risk. On the flood map we can see not only the flood zone, but when close to the water, also the Base Flood Elevation (BFE) which tells us how high a building has to be elevated when constructed in a flood zone. A detailed description of the flood zone designation can be found on FEMA’s website.

The following flood map shows the example of a property located on Anna Maria Island, a barrier island in Manatee County. The subject property is located on 3rd Street North in a high velocity wind zone V17 with a base flood elevation of 15 feet.

A lot of properties were built before establishing the base flood elevations and therefore pose a much greater risk for insurance carriers. Properties, which are not elevated are “legally nonconforming” and have to pay the price for this status with much higher insurance rates when compared to a similar, but elevated structure.

To determine the risk for the subject it is important to have the flood zone information in the insurance appraisal report. The insurance carriers and agents will always conduct their own flood zone investigation, but it is always better to have two sources for a document of such importance.

When you order your next insurance appraisal, make sure your appraiser included the flood map in the report. It is a piece of information for you, the client, as well as a valuable aid for the insurance agent.

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