We had a flood certificate on a piece of property indicating that it was in Flood Zone A. Upon a new loan request, a new flood was ordered and it indicated Flood Zone AE. We found through this process that the zone on the customer's insurance has never matched our zone. When we contaced the insurance company to change the zone from X to AE, they refused upon the bases of "Grandfather" rules because the customer has had the flood insurance for 15 years. I am not familiar with this rule and need some help. Can someone explain if this is valid and how we need to document our file?

Do a search in the threads using +flood +grandfathered and you will find previous discussions with some additional information on grandfathering. Or go to the FEMA Web page and search on grandfathering. If your customer has had flood insurance continuously for 15 years they would fall under the grandfathering exception.

It may be a legitimate claim.

Here is a great FEMA document that I have found helpful in explaining when this is possible. It also includes a handy flowchart (if you can follow it ):

http://www.fema.gov/pdf/nfip/hillsborough/grndfthr_sht.pdf