Okay, I realize this has been discussed before. I've read the
FEMA Bulletin to the insurance agents: http://bsa.nfipstat.com/wyobull/w-08021.pdf.

Based on this memo, I think my discrepancy for this newly constructed commercial building (one floor, no basement) is okay (determination = flood zone A and insurance policy = flood zone AE).

However, when I look in the flood zone manual, I get confused. The policy for zone AE says there is an elevation difference of 2, and the rate is 00.26/00.08. So when I look at the corresponding rates for flood zone A, (per the determination) it doesn't appear that they are comparable. Either I am over-analyzing something I don't need to, or I am looking at the incorrect rate table...any help would be greatly appreciated. Thanks!

We do not investigage so long as the first letter matches. apparently your insurance company has more elevation information than was available on the flood determination panel.

Most of the times I see a discrepancy of Zone A vs. Zone AE, I find one of the determinations is using an outdated map (probably the zone A). Rechecking with the determination company might get an updated certificate (something LOL coverage should have provided, but sometimes get missed).

Generally LOL monitoring will not notify you of a map change. It will only notify you if the status of the property being monitored has changed.

I have a similar sitution: If the insurance company used an outdated map and now we have a discrepany between the determination and the policy due to the map change, what are we supposed to do if the insurance company does not correct the zone and map info on the policy?

Are we still covered regardless of the discrepany? Can we force place insurance if the insurance company does not provide us with a corrected policy?

thanks,

See this:

http://bsa.nfipstat.com/wyobull/w-08021.pdf

We sent that memorandum to the insurance company and we have yet to receive a response from them. I am concerned that we are not covered because of the zone discrepancy. Can we force place insurance in this situation?

thanks,

Below is an excerpt from the FDIC Financial Institution Letter dated December 21, 2007, relative to flood zone discrepancies, which is pretty clear about the expectation placed on lenders.


Federal Deposit Insurance Corporation 550 17th Street NW, Washington, D.C. 20429-9990 Financial Institution Letter FIL-114-2007 December 21, 2007
FLOOD INSURANCE Managing Risks Associated with Lapses in Flood Insurance Coverage

Regulated lenders are being required by regulators to resolve zone discrepancies!
Producers should be aware that regulated lenders will be required to resolve zone discrepancies by requesting documentation to show that a policy qualifies for the Grandfathered zone, if applicable. If such documentation is not available, or if FEMA has not overturned the lender’s determination via one of the letters of map change, the loan will be considered non-compliant. As a result, the lender will require that, within 45 days of the lender’s notice, the policy is rated in accordance with the SFHA determination. Immediately after the 45-day notice, the lender will force place flood insurance, if the borrower has not complied with the lender’s requirement. The forced flood insurance may be more costly than if your client’s policy is changed to reflect the higher-risk determination. Agents must take care to avoid placing themselves and their clients at financial risk and burdening their clients with a higher than necessary flood insurance premium under a force placed flood policy, via the private market.

This would really concern me...using the wrong map? I understand using the wrong panel when you don't know THE exact location on a road and it's right where one panel meets another...but an outdated map? Ouch.

This happens quite often. You'd be amazed at what I see from some agents. I know the vast majority of them do their jobs, but I've heard everything from "the lender has no business getting involved in this issue" to "there are no flood zones in Leesburg, so I can't write a policy for them." Yes, that would be Leesburg, FL.

LOL! That's really funny...look how many LOMA's etc are in that one part of Lake County! And the giganto lakes! Are they STUPID?

Our solution is simple. We tell the agent if they don't want to cooperate then we will not accept their policy and their client will have to get their insurance from another agent in order to close their loan and we'll let them explain to their client what the hold up is in them being able to get their money.

There might also be a NFIP number out there to report really stubborn (and wrong) agents. I'd love to hear if any of you have it or have gone through that process before. Or if I'm mistaken.

I have not filed a complaint with FEMA, but for one particulary stubborn and "rude" agent I threatened to file a compliant with the IN Dept of Ins.