I have a question regarding flood zones. The flood zone on the determination has to match the flood zone on the actual insurance policy...is there anything that says a flood zone can be grandfathered? for example we have a loan from 1999 that was zone B, the map was updated in 2006 and the zone is now AE...can the policy stay at zone B?

Thanks!

If you are extending or renewing the loan, you cannot "grandfather". You could rely on the existing determination only if less than 7 years AND you're not aware of any remapping AND the original is on a SFHD form. Since the zone is changed, presumably there was a remapping and you have to use the new determination.

I don't believe you have to have a new determination solely on a map revision until you extend or renew, but someone with more expertise can comment on that situation.

I think the question was is there any provisions for the actual flood policy to be grandfathered and allowed to continue to show Zone B, although the new FHD indicates AE.

The answer could be yes. From the Flood Insurance Manual:

The implementation of a new FIRM raises the question--HOW DOES THE NEW MAP AFFECT FLOOD INSURANCE RATES?

1. Grandfather Rules

To recognize policyholders who have built in compliance with the FIRM and/or remained loyal customers of the NFIP by maintaining continuous coverage, the Federal Emergency Management Agency has “Grandfather rules.” These rules allow such policyholders to benefit in the rating for that building.

For such buildings, the insured would have the option of using the current rating criteria for that property or having the premium rate determined by using the BFE and/or flood zone on the FIRM (old map) in effect when the building was originally constructed (for those built in compliance) or when coverage was first obtained (for those with continuous coverage). This results in a cost savings to insureds when the new map resulting from a map revision would result in a higher premium rate.

The conditions that must be met for an insured to be eligible to receive the rating benefit from the “Grandfather rules” after a map revision (new map) becomes effective are described below.

The grandfather rule however pertains to 'existing policy holders' who may be able to use the rate charged for the lower-risk zone, when a new map shows them in a higher-risk zone.

I don't believe it pertains to the situation where you were NOT in a flood zone and NOW you are, since you were neve an existing policy holder.

If they are in a participating community, then all buildings are in a "flood zone" and insurance is available. Whether the bank has to require flood insurance based on the specific flood hazard for the building has nothing to do with the grandfather rules. If the borrower had a policy in effect in Zone B and the building was in compliance when originally constructed, they could keep the Zone B rating. They could even purchase a new policy at a Zone B rating.

Some people, even if their property is not in a 100 flood plain, purchase flood insurance because they understand the risks (I for one). Since the original post asked "can the policy stay at zone B?", I assume they already have a policy.


"the insured would have the option of using the current rating criteria for that property or having the premium rate determined by using the BFE and/or flood zone on the FIRM (old map) in effect when the building was originally constructed (for those built in compliance)"

I now know more than I did when I woke up this morning...thanks!