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Message from Jim

As of February 28, 2015, 5.24 million National Flood Insurance Policies are in force, amounting to $1.27 trillion dollars of flood insurance coverage resulting in an average annual premium of $710. Interestingly, 39% of these policies are in a non-Special Flood Hazard Area. Regardless of the location of the improvements being secured as loan collateral, the transition to a different risk continues to create opportunity for the pro-active homeowner or consultant. Let’s discuss flood insurance options that exist if a Base Flood Elevation (BFE) or flood zone changes.

Here is a quick break down:
* Flood zone stays the same, but the BFE increases - grandfather rates may pertain.
* Flood zone stays the same, but the BFE decreases - re-rate the policy.
* Flood zone changes from A to V - grandfather rates may pertain.
* Flood zone changes from V to A - re-rate the policy.
* Flood zone changes from X,B, or C to A or V - purchase a Preferred Risk Policy.
* Flood zone changes from A or V, to X - Conversion Policy.

Above information provided by Bruce Bender, CFM, and Dorothy Martinez, ANFI, CFM, as presented during the "Flood Insurance for Floodplain Managers" workshop, ASFPM National Conference in Atlanta, Georgia, on Monday, June 1, 2015.

These options are provided with the qualification that discussion with your insurance agent is highly recommended prior to any map change since other requirements may pertain.

As the Digital Flood Insurance Rate Maps (DFIRMs) become effective, everyone must remember that a flood map identifies perceived flood risk and more current data will not eliminate actual risk, but will better prepare all to improve mitigation strategies, implement floodplain regulation more proficiently, and rate risk more accurately. For example, new data will be used by engineers to perform models of anticipated extent of flood waters with intention to create a more accurate floodplain boundary line for regulation and insurance rating.

The above photo shows a strategy used by community officials in Biloxi, MS, to remind residents and visitors of the flood risk presented by Hurricane Katrina. Blue "K-Lines" are wrapped around over 70 utility poles in the city, showing the heights of the storm surge. Mayor A.J. Holloway stated, "We’re at the point where people tend to forget how high that storm surge was. Seeing those blue lines on the poles helps drive that point home." (Gulf Coast News, 2014)

In areas where new data and studies have not been implemented, older data from the paper maps probably will be moved to the DFIRMs. In this case, perceived risk will not change but actual risk could be quite different. Of course, the perfect world would require Mother Nature to never exceed a flood boundary line. This is an important understanding of the flood maps. Wrapped nicely around perceived risk is actual risk which brings the water to us.

The program tries extremely hard to match perceived risk and actual risk on an inferior budget, but even with an endless amount of funds, the expectation of perfection should be tempered. Discuss options with an insurance agent, consider having an Elevation Certificate performed to determine eligibility for a reduced insurance premium or a possible removal, and mitigate whenever possible.

Image from the Maine Flood Hazard Map application. Overlaid on aerial imagry are flood hazard layers, FIRM panel numbers, locations of LOMAs, and other useful features.

Resources

The Maine Floodplain Management Program has made significant updates to the Flood Hazard Map Application

Provided by Jennifer Curtis, Mapping Coordinator for the State of Maine Floodplain Management Program

FEMA is in the process of updating floodplain maps for all of Maine’s coastal counties. They are currently in various stages of completion, with the first three counties, Lincoln, Sagadahoc and Waldo, to get new final maps this July. Hancock and Knox counties are awaiting the outcome of appeals; Washington County is anticipating the release of preliminary Flood Insurance Rate Maps (FIRMs); and Cumberland and York Counties are currently in the draft stage. The Maine Floodplain Management Program, in preparation for the revolution of new digital maps for much of the state, has made significant updates to the Maine Flood Hazard Map application available on the Mapping Resources page.

This application serves up the official flood hazard data (also known as the National Flood Hazard Layer, or NFHL) in conjunction with a variety of other state-specific layers for the purpose of making all the data publicly accessible to all internet users, and being especially helpful to community officials tasked with administering the floodplain management program at the community level, planners, and all those engaged in property and structure design, building and selling activities.

Floodplain managers will especially appreciate: the integration of NFHL and Q3 data layer (Q3 is an unofficial digital estimate of the SFHA – not to be solely relied on for regulatory purposes) with parcel data (where available) and USGS topo map layer, which will help them produce estimates of flood hazards to a particular property, estimate site contours, and identify flooding sources.

The general public will appreciate: the integration of ortho-imagery (aerials) with direct links to the specific PDFs of the maps for any given location that will become final in Lincoln, Sagadahoc and Waldo Counties in July (currently called “pending” maps).

Property managers will appreciate: ortho-imagery (aerials), and parcel data (where available) to aid in estimating the impacts of the flood hazard zones on property.

When the pending maps for Lincoln, Sagadahoc and Waldo Counties become effective, they will simultaneously become integrated into the NFHL, and the Q3 data that is currently shown in those three counties will be replaced by the new NFHL data.

The Maine Floodplain Management Program owes a debt of gratitude to the Maine Office of GIS, and Chris Halstead, Director of Earth Resources Information at the Maine Geological Survey, for creation and update of this application.

For elevated buildings in an A Zone with an enclosure below the elevated floor, including an attached garage, the enclosure or garage floor becomes the lowest floor for rating if the enclosed area is 1) finished - having more than 20 linear feet of interior finished wall, 2) used for purposes other than access, parking, or storage, or 3) has no proper openings or flood vents.

Flood Fact: Enclosures

Enclosures are the the portion of an elevated building below the lowest elevated floor that is either partially or fully shut in by rigid walls.

If you have an enclosed area below the lowest floor, how it is enclosed and what it is used for can have a significant impact on flood risk and insurance rating. Special attention is given to these areas when the property resides in a high risk flood zone because the walls of enclosed areas are subject to flood damage from hydrostatic (standing) and hydrodynamic (moving) forces of water. These areas must be designed so they are subject to minimal flood damage, using only flood-resistant materials, cannot contain utilities unless above the Base Flood Elevation, and should not be converted to a living space. Learn more!

In the News

New Federal Flood Protection Standards Will Prepare Nation for Climate Change

By Rob Moore, Switchboard: Natural Resource Defense Council Staff Blog, May 6, 2015
The president recently signed an Executive Order that will update flood protection standards that federal agencies will use when deciding where and how to build, as well as what projects should receive federal funding. The Executive Order (11988) also establishes an improved margin of safety, calling for agencies to evaluate the impacts of climate change that increase future flood risk. Read more!

For more information, check out the FEMA Fact Sheet, "The Applicability of Executive Order (E.O. 11988/13690) to FEMA Programs", published June 2015.

New Study Shows How Florida Citizens Subsidizes the Rich

By Ray Lehmann, Insurance Journal, May 18, 2015
This article provides an interesting comparison of the state-run "Citizens Property Insurance Corp." vs. federal flood insurance markets in Florida, the state with the highest level of flood risk, the most policy holders, and according to this study, the greatest number of subsidized premiums going to the wealthiest property owners.
Read more!

Jim Nadeau will be joined by Robert Danielson, Esq. from Old Port Title, in presenting at the Maine Association of Mortgage Professionals' June Breakfast Meeting.

Events

Water, Water Everywhere - Impact on Lending in Maine: Flood Insurance & Shoreland Zoning

Maine Association of Mortgage Professionals June Breakfast Meeting
June 10, 2015 at the Portland Country Club
11 Foreside Road, Falmouth
8:00 AM - 10:30 AM

For more information and to register for the event, click here. Registration ends June 5, 2015

The 2015 Maine Beaches Conference is July 17, 2015 and Registration is Open!

Southern Maine Community College, South Portland
This year's conference will have 2 Plenary and 12 Concurrent sessions,13 exhibits, 18 posters, and 15 interactives, on a diversity of topics relating to coastal resiliency, floodplain management, environmental monitoring, climate impacts, and more!
Click here to learn more and to register!

Fun Fact

The Summer Solstice is on June 21, 2015!

During the summer solstice, generally referred to as the first day of summer in the northern hemisphere, the earth is tilting at its furthest toward the sun, at which point it reaches its highest position in the sky as seen from the poles, and produces the longest period of sunlight all year.