One of the biggest things that a lot of property owners might be worried about flood insurance is the mandatory purchase requirement. But, in some cases, you can actually fight this.

In this blog, we talk about how flood insurance can be canceled after getting your flood zone changed.

Changing Your Flood Zone

When it comes to flood insurance, it's important that you also are aware of the flood zone designation, especially for your property. One of the key things to remember is that flood zones are not permanent and they can change over time.

Let's just say you have a property that's mapped into a low-risk flood zone like flood zone X, this doesn't mean that that building will stay in that zone forever. This is especially true as flooding impacts how flood insurance rate maps (FIRM) work.

Sometimes, when a flood insurance rate map update comes to your community, this could mean that you might see your property get moved into a high-risk area like flood zone A or flood zone AE. Having your property or building mapped into a high-risk flood area generally results in a mandatory purchase of flood insurance.

To see your revisions to your community's flood maps, you can CLICK HERE to visit the official website for FEMA flood insurance rate map (FIRM) changes.

This requirement might come from your mortgage lender or the state law itself such as the Federal Emergency Management Agency's (FEMA) standards. But, what if you know that your property shouldn't be in a high-risk flood zone? How do you fight these changes?

This is where what's called a Letter Of Map Amendment (LOMA) comes in to save the day.

Letter Of Map Amendment

A Letter of Map Amendment (LOMA) is an official document that's issued by FEMA to process the change of a flood zone designation for a property. A LOMA is achieved after a successful application for a Letter of Map Change (LOMC) thru FEMA's official website.

It helps to have the necessary information and documents when applying for a LOMA. One of the helpful supporting documents you can provide is an elevation certification. Although elevation certificates are no longer required — especially with the recent update to the National Flood Insurance Program (NFIP) and Risk Rating 2.0 — this can really help a lot in proving the validity of your request to be mapped out of a high-risk area.

An elevation certificate will show a more accurate representation of your property such as its risks from flood water, base flood elevation, its exact distance from your lowest habitational floor, and other relevant information.

Once you get a LOMA secured for your property and have your property removed from the Special Flood Hazard Area (SFHA), that's the time when the mandatory flood insurance purchase will also be removed.

Canceling Flood Insurance

The next step is to inform your flood insurance carrier or provider that you are intending to cancel your flood insurance. Again, it's important to note that being moved out of a high-risk flood zone will automatically cancel your flood insurance.

In order to cancel your flood policy, you must send a signed cancelation letter to your flood insurance carrier. Regardless if you have a private flood insurance policy or federal flood insurance, you must show them this document to certify that you are intending to cancel your flood policy.

After this, you also need to inform your bank about the cancelation by sending them the same signed cancelation letter so they would no longer enforce the flood insurance purchase requirement on your property.

This is important as both the flood insurance company and your bank are the ones determining the flood insurance requirement for the property. Additionally, you may also send them the Letter of Map Amendment (LOMA) that you were able to get to show them that your flood zone has been changed.

Flood Risks Now

Removing the flood insurance requirement with your property may really help in saving some money from flood insurance premiums however it's really important to remember why a purchase of flood insurance can help you long-term.

When it comes to actual flood risks, the reality is that even low-risk flood zones can be flooded too. This also means a Letter of Map Amendment (LOMA) won't guarantee that your home no longer has flood risks.

This is why we still encourage property owners to get flood insurance coverage for their property. A single flood policy will be able to provide building and contents coverage, so both the structure and your personal property inside it will have flood protection.

If you have questions regarding flood zones, flood insurance, or anything flood-related, click below to access our Flood Learning Center to get your answers.

Ready to start simplifying your flood insurance? Just follow these three simple steps:

• Fill out this form —
• Talk with our flood education specialist.
• Get back to the important things in your life.

In today's FEMA Cancellation Reason blog, we want to talk about payments and how they can lead to your flood insurance policy actually getting canceled. Sheesh!

We've covered much ground when it comes to the changes that are looking to update FEMA's structure when it comes to policy cancellations. We've talked about the first five categories which are canceling your insurance due to no insurable interests, establishing common expiration dates, duplicate coverage, being ineligible for flood insurance coverage,  and policy is no longer required by the lender. These are Categories #1 through Category #5 respectively.

Let's talk about when your payment encounters a wall and also when the payment is fraud involved.

Category #6 - Invalid Payment and Fraud

When it comes to the legacy program of the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) or simply NFIP 1.0, there's a separation between the cancellation of a policy due to invalid payment and fraud. You can actually see this on how they're numbered — exactly 17 numbers apart.

Reason Code #06 — When it comes to invalid payments, this is mostly concerned with payments for your flood insurance policy not meeting the expected amount. Maybe there's been confusion between you and your agent that you sent FEMA a lesser amount of money than expected.

Sometimes, when renewing a policy, you might think that you will have the same amount as before, so you had the payment sent out when it's actually less than your updated premium. This can also happen, theoretically speaking, when your lender didn't provide them enough payment to cover all the insurance costs.

The thing about flood insurance payments (or any insurance payment to be exact) is that they have to match the expected amount for the total premiums. Yes, down to the taxes and cents, you're expected to provide your insurer with the proper amount of payment to proceed with your policy.

When this happens, your policy will be canceled by the insurer or FEMA due to Reason Code #06.

Reason Code #23 — Now this is something that you should really avoid with all your power. However, here's an example in the name of knowledge, there are some situations where the insured will commit fraud by faking their payment for their FEMA policy.

We really don't need to expand on this since fraud is fraud even when it comes to flood insurance payments. Just keep in mind that when FEMA detected fraud on the flood policy's payment, there will be no refund and the policy will be canceled.

What's Changing?

When it comes to Risk Rating 2.0 or NFIP 2.0, these cancellation details will be updated. We'll no longer see Reason Codes since they will be changed to Cancellation Categories. 

Any cancellation of a policy due to invalid payment and/or fraud, which are Reason Codes #6 and #23 respectively, will be combined under Category #5.

It's important to note that flood insurance payment is a crucial factor in your purchase. Having a delayed payment might cause your effectivity date to move and your coverage to lapse. Having an incorrect payment will cause your policy to be canceled. Both of which can have a big impact especially now that we can't really predict when floods can happen.

If you want to get help understanding payment terms on flood insurance, not only with FEMA and the NFIP but also with the private insurance carriers, reach out to us by clicking the links below.

If you want to know how flood insurance work, and how your FEMA policy can be canceled, where to buy flood insurance, understand your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

You can also click my picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

We've talked about the updates for canceling flood insurance policies from the federal side of flood insurance.

We've covered things like no insurable interests, establishing common expiration dates, duplicate coverage, and being ineligible for flood insurance coverage which are Categories #1, #2, #3, and #4 respectively.

Today, we'll keep the train going as we want to discuss Federal Emergency Management Agency (FEMA) Cancellation Reason and what category covers it when your mortgage lender no longer requires you to carry flood insurance for your property.

Flood Zones & Why They Matter

Before we dive into the cancellation details in both the legacy and updated program, we want to review first the conditions where your mortgage lender will require you to get flood insurance for the property.

If you've been following us, you know that we really highlight flood zones when it comes to our content. Other than this being a threat to your safety as flood zones determine which areas are more prone to floods, it's also a headache when it comes to costs.

Depending on what zone your property sits on, your mortgage lender can actually require or not require you to carry flood insurance for the property.

One of the situations or conditions where this can happen is when your property sits on a high-risk flood zone like Flood Zone A, Flood Zone AE, or any flood zone that starts with an A honestly. This also includes the coastal Flood Zone V.

This is because both the federal government (i.e. FEMA) and your bank will make sure that the property has enough safeguard in place to protect your home from flood damage and flood loss. Another reason where your mortgage will require you to carry flood insurance is sometimes solely based on the lender's discretion.

The flood zone of your property will solely be based on the current flood insurance rate map (FIRM) or flood maps that your community has. The thing about FIRMs or flood maps is that properties will get moved into or outside of these high-risk zones or the SFHA. Whenever there are new flood maps, you can expect that properties will also be changed from a low-risk flood zone to a special flood hazard area (SFHA).

Category #5 - Lender No Longer Requires Insurance

Now, let's say you're in the SFHA which means that you're being required by your lender to have flood insurance on the property, and then FEMA and the NFIP release a new FIRM for your area which causes your property to be moved to a flood zone X. As you can remember, flood zone X is one of the most common low-risk flood zones and doesn't really require properties to have flood insurance.

This means that you can cancel your flood insurance for that property. Although we highly discourage canceling flood insurance when you're in a low-risk zone because you can still get flooded at any given time, you can still continue without flood insurance.

In the legacy program, you can have your policy be canceled through Cancellation Reason Code #8 to indicate that your lender no longer requires flood insurance on your home.

What's Changing?

As you know by now, FEMA's changing the cancellation details, and for Reason Code #8 or when a policy is no longer required by the lender will be classified as Category #5. This means that Reason Code #8 will no longer be available to be used as a cancellation reason because it's been changed to Category #5.

Here's a list of the conditions that FEMA wrote when it comes to the Category #5 cancellation reason:

1. Your lender required you to get flood insurance for a loan closing, but later on, discovers that the property doesn't reside in the SFHA.
2. There are no paid or pending claims.
3. Your insurer has to inform you that you can keep the policy despite not being required instead of canceling it.

This can really be a good thing when it comes to finances because you get to eliminate flood insurance costs from your budget however, as we said before, it's not really something we encourage since flood insurance protects you from losses even if you're not in a high-risk flood zone.

Equally, it's important to note that FEMA themselves has shown data that at least 25% of flood insurance claims come from low-risk flood zones. In layman's terms, low-risk flood zones get flooded too.

If you want to get help understanding when you'll be required to carry flood insurance, not only with FEMA and the NFIP, but also with the private insurance carriers, reach out to us, how flood insurance work, and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

You can also click my picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

We have talked about canceling your FEMA flood policy due to Category #1, Category #2, and Category #3 which are No Insurable Interest, Establish Common Expiration Date, and Duplicate Coverage respectively.

Today, we want to talk about the dreaded scenario when buying flood insurance and also may fall into the cancellation of your flood insurance policy with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP): Not Eligible for Coverage.

Let's talk about this and what category number it falls into with the updated federal flood insurance cancellation reasons.

Category #4 - Not Eligible for Coverage

When it comes to flood insurance, homeowners and business owners alike are expected to follow a standard when it comes to insuring their property. With regards to the federal flood insurance, the SFIP always takes effect on properties looking to get flood insurance from FEMA and the NFIP.

The Standard Flood Insurance Policy (SFIP) contains a list of reasons why you may not be eligible for coverage against floods from FEMA and the NFIP. Generally, you can expect that if your property doesn't meet FEMA's and the floodplain management's regulation, you won't be able to get coverage for that property (i.e. mobile homes).

Now, when it comes to policy cancellation, either the insured or insurer can cancel the property because it doesn't follow necessary expectations to meet the eligibility for flood insurance coverage.

With FEMA and the previous version of the NFIP, this used to be written in Reason Codes #06, #27, and #29. Let's talk about the conditions that will cancel your policy per Reason Code.

Cancellation Reason Code #06 simply entails that a property will not eligible if it either (1) doesn't meet the structure code for to meet the definition of a "building", (2) the contents aren't located in the building/property, (3) the property is not in a NFIP participating community, (4) the property is located in the Coastal Barrier Resources System (CBRS), and (5) the building is declared a 1316* prior to the flood insurance application.

*1316 declared building is any property that does not meet floodplain management regulations.

What's Changing?

When it comes to the cancellation update and changes, this Reason Codes will be removed and will be categorized under FEMA Cancellation Category #4.

This means that if your property, by any chance, can't receive flood insurance coverage, you or your insurance agent will have to cancel the policy under Category #4.

You see, when it comes to flood insurance, it's a good thing that a lot of people already applies for a flood policy ahead of time to maximize the coverage time. However, we see a lot of homeowner and mostly business owners who will find out that they're not eligible.

In order to avoid having your resources go to waste, we really encourage that you communicate with your insurance agent first before getting a flood insurance for your home or business. A great insurance agent will help you check if you're eligible for FEMA flood insurance before they even help you apply for one.

Not being eligible for flood insurance, regardless if it's from the federal or private market, can really be a disappointing experience.

If you want to get help understanding  your eligibility for flood insurance, not only with FEMA and the NFIP, but also with the private insurance carriers, reach out to us, how flood insurance work and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

You can also click my picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

The Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) are stepping on the gas to upgrade their services when it comes to flood insurance.

In today's blog, we want to address one of the most important changes coming with the Risk Rating 2.0 when it comes to the cancellation federal side of flood insurance.

What happens when your coverage is duplicated between two policies? How will it be canceled now that's NFIP switched to Risk Rating 2.0?

Category #3 - Duplicate Coverage

When it comes to purchasing flood insurance, it's not impossible that a homeowner will get duplicate policies. After all, having an option is better than none at all. However, this type of situation creates a possible chance that the flood policy of the insured will be duplicated.

This is why FEMA and the NFIP allowed policyholders to have a flood policy canceled if there's an unintentional or, basically, accidental duplication of your flood insurance.

In the previous NFIP Legacy Program, this is known as either Cancellation Reason Code #04, #10, or #26. Let's talk about how these three are different from one another.

Reason Code #04 indicates that a policy may be canceled if there's a duplicate in coverage. This means that you might be registered under two different flood insurance policies for the same name, address, coverage amount for the building and its contents.

When it comes to this Reason Code, one of your duplicated policies will be canceled in order to either (1) establish a common expiration date, (2) the dwelling/building policy coverage due to RCBAP (more on this later), (3) there's a force-placed policy from the mortgage when the insured/borrower already bought a flood policy, (4) a policy of earlier date already expired, or (5) a Group Flood Insurance Policy (GFIP) needs to be canceled to move into a standard-rate policy.

Reason Code #10 mostly concerns renters. This Reason Code's cancellation indicates that the policy needs to be canceled due to either the policy with only building coverage is being replaced by the Residential Condominium Building Association Policy (RCBAP), or the unit owner or RCBAP building limits are more than what FEMA coverages offer.

Reason Code#26 is for those who bought a policy from private flood insurance carriers and didn't want to push through with their NFIP policy's purchase or renewal.

The NFIP policy will be canceled depending on your discretion, so they won't really cancel it for you without your confirmation. This is very helpful to keep in mind especially for FEMA policyholders who are switching to private carriers for their flood insurance needs.

What's Changing?

Generally, the details and conditions of the three aforementioned Reason Codes still apply to the new Risk Rating 2.0 program. However, in order to avoid confusion, FEMA and the NFIP decided to combine Reason Codes #04, #10, and #26 into one Category.

FEMA Cancellation Category #3 is basically what you'll need whenever you need to cancel a federal flood insurance policy because it's a duplicate. This change can really be helpful for homeowners and business owners alike who won't have to keep on reviewing the FEMA handbook to know what's the best Reason Code for their situation.

This is also a great tool for those looking to move into the private insurance carriers to get a more fitting policy for their coverage needs.

These changes can be confusing, so if you need help understanding how flood insurance work and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

You can also click my picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

We moved out of the legacy program of the Federal Emergency Management Agency (FEMA) and are now officially going to adopt the Risk Rating 2.0 program for the federal flood insurance. In our previous blog, we were able to establish what's changing with these cancellation reasons with the Risk Rating 2.0 program.

Other than the changes coming to the overall rating structure of flood policies with the National Flood Insurance Program (NFIP), we're also going to see some changes to cancellation reasons.

Today, we want to focus on Category #2 of FEMA Cancellation Reasons: Establishing a Common Expiration Date. Let's talk about it.

Category #2: Expiration Dates and More

When it comes to flood policies, it's important that you have the correct effectivity and expiration dates. This is a matter of life and death when it comes to your property's status.

When we say effectivity date, we're simply talking about when you're policy is going to start covering flood damages that may occur on the insured building or property. On the other hand, the expiration date is when the flood policy will no longer take effect when it comes to coverages to flood loss.

The thing about these dates is that it's pretty common to get it mixed up and two policies will be written for the same property with different effectivity and expiration dates. This isn't allowed even in private flood insurance.

In order to resolve this issue, FEMA and NFIP handles the situation by canceling the other policy. The policy that will be canceled won't be based on when it was written, but whichever has the higher coverage.

Simply put, you will take up the FEMA flood policy that has higher flood insurance coverage for your insured building no matter what. This also means that the approved policy's expiration date will be followed and the rejected one will be canceled.

If you ever get into the situation where your policy is written for two different expiration dates, one obviously needs to get canceled. In the NFIP Legacy Program or NFIP version 1.0, the cancellation will be written with Reason Code #03.

What's Changing?

When it comes to the updated cancellation reasons for Risk Rating 2.0, Reason Code #03 will be changed into what's called Category #2. Generally, the numbering was moved up because the previous Reason Code #2 already gets covered in Category #1 alongside Reason Codes #01 and #07.

In order to have a policy canceled due to Category #02, the policy must meet two conditions:

1. The insurer must remain the same for the new flood policy with the same or higher amounts of coverage. The agent must submit a new application and premium.

This simply means that your insurance agent must submit a new application finalizing your flood policy application to FEMA and NFIP in order to match the correct expiration date and the higher coverage limits for your property.

This condition also means that you can no longer change to another insurer. Generally, condition #1 asks the insured and agent to simply correct any mistake within the flood policy, especially the expiration date.

2.  The other insurance coverage for which the common expiration date is established must be for building coverage on the same building insured by the current in-force flood policy.

You can cancel your policy however according to condition #2, FEMA Cancellation Category #2 will only be written to establish the same expiration date of the policy. You can't insure a property that's different from the current one you have.

Having the correct dates and coverage on your policy is really important and getting it wrong will only cause you more headaches once floodwater starts to inundate your property. Having two different expiration dates can mean that your policy will already lapse when you need it the most and you're not going to get covered.

These changes can be confusing, so if you need help understanding how flood insurance work and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

You can also click my picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

We moved out of the legacy program of the Federal Emergency Management Agency (FEMA) and are now officially going to adopt the Risk Rating 2.0 program for the federal flood insurance.

Other than the changes coming to the overall rating structure of flood policies with the National Flood Insurance Program (NFIP), we're also going to see some changes to cancellation reasons.

Today, we want to focus on Category #1 of FEMA Cancellation Reasons: No insurable interests.

Category #1: No Insurable Interest

First, we want to address the following conditions wherein this new category falls. In the previous version of the NFIP, "No Insurable Interest" actually falls under three separate reason codes. These reason codes are #01, #02, and #07. Let's do a quick review directly lifted from FEMA's handbook on cancellation rules.

First, let's cover the conditions wherein this cancellation reason can be considered under Reason Code #01.

The conditions mostly cover the idea that the property can't be insured either due to it failing to meet the standards of the NFIP and FEMA to be eligible for flood insurance coverage. These conditions are either (1) the building/property is at a total loss due to damages and it's basically unsavable, (2) when the developer or builder has requested to cancel the policy mid-term due to the homeowner moving into another property, and (3) maybe even due to a failure of the property transfer or the closing of a deal on the house's purchase.

In Reason Code #02, the conditions are either (1) the property has been transferred to another owner, (2) the contents are completely removed or moved from another place due to the previous condition, and (3) the contents were destroyed by a peril like floods, earthquake, or a fire.

Lastly for Reason Code #07, will consider either (1) an insurer issues a policy and the anticipated transfer of the property does not take place, or (2) the insured does not acquire an insurable interest in the property.

Based on these two items, this is mostly regarding homeowners who applied for flood insurance with FEMA and the NFIP before they purchase a property. Think of it this way, you bought a flood policy first to make sure that the property gets flood insurance coverage, but you haven't really bought the house or the transfer hasn't been completed yet.

The cancellation reason will take place once this property wasn't transferred to the buyer, therefore, nullifying the proposed flood insurance policy on that property.

What's Changing?

In the new Risk Rating 2.0 update, this "No Insurable Interest" reason actually falls on Reason Codes #01, #02, and #07 when it comes to the legacy program of the federal flood insurance. However, the new update moves these three reasons into one Category that caters to any and all conditions where the property simply isn't there anymore to be insured by a flood policy.

In Risk Rating 2.0, this becomes Category #1 and is actually easier since if you can notice, there were multiple repetitions within the legacy program's Reason Code #01, #02, and #07. This avoids any confusion since we're talking about conditions which is a great move on FEMA and NFIP's part.

So if your house closing didn't push through, the property was completely destroyed, and/or builder requests for cancellation, this already gets covered in FEMA Cancellation Rule: Category #1. No need to go back into the three codes because this category already covers your concern and it's easier for both homeowners and insurance agents to help your policy get nullified and eventually canceled altogether.

These changes can be confusing, so if you need help understanding how flood insurance work and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

You can also click my picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.