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Welcome to the Flood Zone!

A nationally distributed resource for those interested in flood zone issues, land surveying, real estate, history, and educational opportunities. If you no longer wish to receive this newsletter, simply click the unsubscribe link in the footer of this message.

P1300584

Jim Nadeau, PLS, CFM, CFS, ANFI, Realtor

Message from Jim

This is our 39th issue since we started Welcome to the Flood Zone and there has been no shortage of topics to discuss. This month, I could not decide on just one topic to share, so below are some thoughts on flood awareness and education.

Understanding the Biggert Waters Reform Act of 2012 (BW12), as well as the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), is vital in safely guiding our clients. In a recent class I instructed, I was asked a question pertaining to grandfathering and my response was, “yes, no, and yes”. In other words, there could have been different answers to the same question depending on when it was asked. Be aware of program changes.

The opportunity will always be present for any consultant desiring to increase personal flood program knowledge to better serve clients and communities. The best relationships are built on trust, and in my opinion, there is no better way to build trust than to help someone. People often remember others based more on how they made them feel than what they said or did. Exceed client expectations.

The movement of flood into Realtor documents across the country is exciting news! Realtors play an influential role in the program; no different than architects, insurance agents, code enforcement officers, engineers, surveyors, or other land use professionals. We have a responsibility to relay important information to property owners, guide sound decision-making, and improve community perception of a highly misunderstood program.

The importance of mitigation should never be underestimated. A massive iceberg six times the size of Manhattan (Dunham, 2014) broke off last month in Antarctica which followed an iceberg the size of Chicago breaking off last year. This trend will continue, and mitigation must become a priority.

Perhaps the hottest topic pertains to a perception of no longer needing an Elevation Certificate (EC) since the HFIAA put some subsidies back in place and eliminated the requirement to obtain an EC to rate a Pre-FIRM subsidized structure (see “Insurance Corner” below for more information). I would argue that EC’s are needed more than ever. We have been able to aid clients deciding to be proactive by presenting options to minimize risk and lower or eliminate flood insurance premiums. Of course, removal of mandatory flood insurance requires a Letter of Map Amendment.

We should always remember: FEMA’s Flood Insurance Rate Maps are used as guides to assess a premium based on perceived risk. In a perfect world, perceived risk and actual risk would be the same, but since actual risk can only be estimated it will stay in flux while perceived risk will be somewhat stable due to the maps. Understanding the difference is extremely beneficial in preserving real estate values, personal safety, and our natural resources.

Remember, continuing education should remain a goal for anybody who wishes to further their personal and professional development. Make an effort to learn more about issues that affect your business and understand that this knowledge holds immense value. Uncertainty and confusion are often opportunities in disguise. Think about what you can do to be that cutting edge professional and set goals for yourself to move forward. Learning nothing new gets you nowhere. Paraphrased from Lewis Carroll's Alice in Wonderland, “If you don’t know where you are going, any road can take you there.”

~ Jim

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hallowell

The Gardiner Savings Bank in Hallowell, Maine during the 1987 flood. Photo by Robert Young, NWS.

Resources

New England Coastal Studies Fact Sheet Now Available in FEMA's Publications Library

Per FEMA's website, "This fact sheet highlights general information and resources related to the ongoing coastal flood hazard mapping studies in New England. It explains the benefits and the methodologies of the studies, while providing a glossary of key terms and answering common questions asked regarding coastal flood hazard mapping studies in New England."

Click here to access the New England Coastal Studies Fact Sheet.

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update

Insurance Corner

Homeowners Flood Insurance Affordability Act (HFIAA) updates on Elevation Certificates:

Elevation Certificates (ECs) are no longer required to rate Pre-FIRM policies for insurance purposes, but they should still be considered because:
1. Insurance agents can use ECs to compare subsidized vs. actuarial rates. (Policy holders can opt for the lower premium and compare the rates at each renewal.)
2. ECs allow both agents and community officials to access important elevation data that could be used for mitigation and compliance purposes.

Action

Flood Insurance Disclosure for Brokers and Agents

While we work toward educating agents about the NFIP, we understand there is still some disconnect between gaining the knowledge and acting on it. We all want to provide a well-rounded service for our clients, but many are going into uncharted territory when it comes to flood, and liability is always a concern.

Click here to download a pdf of a document recently updated by the National Association of Realtors on Disclosure of Flood Insurance Requirements, Rates, and Rate Increases.

As you may know, disclosure becomes a factor of having "actual knowledge" that an issue, or a potential issue, exists. When it comes to a complex and constantly changing topic such as flood insurance requirements, many might be inclined to think, "I don't want to know" or "That's not my expertise" because they are unprepared to consult on the subject.

Do not feel like you need to be an expert on flood insurance or mapping to share awareness on these issues. But if flood insurance does come up in a deal, agents should have the ability to guide clients toward sound resources and help them understand their options.

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June Flood Funny

FLOOD-INSURANCE-RATES-CARTOON
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