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: