We are doing a condo loan and the SHFD form says the zone is VE. We have a copy of the flood insurance policy that says 138 units are zone VE and 573 units are zone X. Our condo unit is a zone X. We have calculated coverage based on our loan amount and the replacement cost of the unit, and we have coverage. Our concern in the difference in zone. Is this an issue?

Yes. Either your determination is wrong, the policy is grandfathered, or the policy is written for the wrong zone.

OK. The flood insurance company says part of the building is in zone VE and part in X. I thought the entire building was always included if part of the building was in the flood zone?

Is there more than one building involved in this condo complex?

No. The building is shaped like a crescent. They say the back part of the building is in zone x.

Never heard of such a policy and I see no reference to this possibility in the Flood Manual. You might have to call the NFIP to see how this is possible.

If it's a single building then if any portion of the building is located in a SFHA then all of the building is located in the SF HA. I'm not aware of any exceptions for a RCBAP.

The only thing that I can possibly think of is if due to the crescent shape the "curves" are separated by a firewall, that would in essence make the sections separate buildings for flood purposes.

That's the only thing that came to my mind as well...some type of firewall separation.

We do not have a response yet from the company. However, if there are no firewalls in the building, how do I figure my coverage? They have two separate policies. One policy for VE units and a policy for X units.

Before you can calculate your coverage you have to resolve the building issue. Only then will you know if flood insurance is required or not on the unit you are financing.

I'm curious. Are all "X" units located above the ground floor?

We do not have anything from the insurance company stating which unit numbers are in the VE or X zones. They just supplies a total for each. We did have a response from the insurance company about the firewalls. There are numerous firewalls in the structure.

We sent a review to our flood provider. They say that the entire structure is in VE due to part of the structure being in VE. So my determination says VE and the insurance says X. What do I do?

This is a difficult case, PM. The firewalls could be meaningful, in that there would/might be a policy per each section divided by a firewall. To be a true firewall, however, if memory serves me, it has to be solid...it can't have doors, etc.

If this is not what's going on (back separated from front) then you have a bigger issue. FEMA requires going with the worst result. VE in your case. However, trying to get an association to change their coverage could be impossible.

Would your customer be willing to get his/her own coverage for their unit on the VE rating, such as you would do if the building wasn't properly/sufficiently covered?

I would, however, talk to FEMA, or more importantly, the NFIP folks, and see if this is viable on a multi-unit type building.