As we got past April 1st, we officially move out of using flood zones as a means of rating flood insurance. However, these zones still have a grip on flood insurance concerns.
With 16 new maps to be added to the county, let's look at the good, the bad, and the ugly changes coming to Gilpin County, Colorado with this new flood map update that's coming on April 6th, 2022.
Flood Map Changes
When it comes to flood map updates from the Federal Emergency Management Agency (FEMA), this generally shows you three separate changes which we'd call the good, the bad, and the ugly changes.
So, what are these changes coming to almost 10,000 properties in Gilpin County, and how do they impact your flood insurance?
When it comes to the good changes in flood map updates, this generally falls into the "in to out movement". It's called this way because a property that's in a high-risk flood zone will be moved out to a low-risk flood zone like Flood Zone X.
This is a good thing for about 171 properties owners are impacted by this movement in Gilpin County. This simply means that your property is being removed from the special flood hazard area (SFHA).
This also means that due to the lower risks, your mortgage company will no longer require you to carry flood insurance on your property.
Although we'd love to tell you to cancel that policy, get your refund, and save more money by removing flood insurance from your expenses, it's still a bad idea to not have flood insurance.
Yes! This is especially true if you're in a low-risk flood zone. Mostly, this is due to the fact that even Flood Zone X gets flooded and sometimes they get flood damage that is substantially worse than those in coastal zones or SFHA. FEMA even reports that at least 25% of flood claims come from low-risk zones.
Now, let's move into the bad changes which are coming in form of the aforementioned "out to in movement". This change is expected to impact about 368 properties in Gilpin County, Ohio.
Unlike the good change, this means that if you're one of the 368 properties, you'll be getting moved into a high-risk flood zone. Think of it as getting mapped to a Flood Zone A when you were previously in a Flood Zone X.
It's out of Flood Zone X and into Flood Zone A this time around.
Although this doesn't really impact premium rates directly, it's important to note that Flood Zone A generally means that the area doesn't have a base flood elevation. So floodplain administrators don't really know where and how flooding can start.
Putting two and two together, these areas are generally experiencing more unpredictable flood behavior and as a property owner, your chance of flooding can't really be pinned down easily.
Despite not being a basis for flood insurance premiums anymore, if you don't install the necessary flood prevention or mitigation measures, this can still hurt your premium rates regardless of whether you're doing a National Flood Insurance Program (NFIP) policy or a private flood insurance one. Properties in Flood Zone A, SFHA, or any high-risk zone are also required to carry flood insurance always.
Lastly, we have the ugly change or "in to in movement" which covers the largest impact on this flood map update for the county. At least 671 properties will retain their flood zone. This means that if you're in Flood Zone AE, you will stay there until the next flood map update.
Equally, "in to in" may also indicate properties that are in Flood Zone X will stay in this low-risk flood zone; however if you're in the SFHA, this might also mean that you're being mapped deeper into it. Think of it as moving from a Flood Zone A to a Flood Zone AE.
If you're staying in your flood zone this means that you will also retain the same flood insurance rates since your risks stay the same. On the other hand, if you fall into being moved deeper into the SFHA, which indicates that you're facing a higher risk for flooding, you will also see your premium rates skyrocket.
Being in flood zone A is already a bad thing, but this can become ugly if you move into a Flood Zone AE because generally, this type of high-risk area in the SFHA indicates that the base flood elevation has been determined.
Now, that you know these changes, it's best to also know your flood insurance options in Gilpin County especially if you're one of the property owners that are being moved into or are staying in the SFHA where flood insurance is required.
The National Flood Insurance Program (NFIP) is purely managed by the federal government since this is FEMA's answer to flood insurance. An NFIP flood policy can get you flood coverage on both your dwelling and the contents within it.
There is a coverage limit when it comes to federal flood policies. Flood damage to buildings will be covered to a maximum of $250,000 for residential policies and can only go up to $500,000 maximum if it's for a commercial property.
Regardless of the type of property you have written, you can expect to get a $100,000 maximum contents coverage from an NFIP policy.
There's also what's called the Increased Cost of Compliance (ICC) coverage. This is a $30,000 additional coverage for your property in order to make sure that there are flood mitigation efforts made on the property.
Generally, this can include sandbagging your property, installing floodproofing walls, raising your lowest floor from the base flood elevation levels, and putting flood openings. The labor that goes into making these mitigation efforts happen will also be covered under the ICC.
There are also perks to a participating community in Gilpin County. A participating community gets access to federal flood insurance and disaster assistance, but more importantly, you also get to work with your community on raising your Community Rating System (CRS) score.
The CRS measures and rewards the overall flood mitigation efforts done by the community according to FEMA's standards on floodplain management. Simply put, the higher your CRS score is, the bigger the flood insurance discount you'll get from FEMA and the NFIP.
You can start enjoying your NFIP policy after a 30-day waiting period from the flood insurance purchase.
If the federal flood insurance option doesn't really work for you then you can manage this new floodplain mapping through the private flood insurance market.
Private Flood Insurance
It's important to note that this market will solely be managed and provided by private insurance companies which generally means that the red tapes FEMA and NFIP has to go through won't be there.
The first thing you'll immediately see with the private flood market is that there are significantly shorter waiting periods for your flood policy. Once you have everything settled and paid for, the waiting period for the private flood carriers will follow a much shorter timeframe compared to NFIP. A private flood insurance policy can take effect for 3 or up to 15 days maximum.
Another good thing coming out of private flood insurance is that there are no coverage limits. This means that you won't really need to stress over how to get covered for a $500,000 home since it will be fully covered by your policy.
This is the same with contents coverage and you'll also get additional coverages like replacement costs, additional living expenses, and loss of use.
At the end of the day, the choice of where you'll be getting flood insurance depends on you. What's really important is that you know your flood risks and have enough protection from all possible outcomes of a flood event such as flood loss and flood damage.
Click the link below to access our Flood Learning Center where we try to answer your questions on flood insurance and beyond.