Overview
Since damages resulting from flooding are usually not covered under regular homeowner or business insurance policies, specific flood insurance policies are needed. Renters may also purchase contents coverage flood insurance. The National Flood Insurance Act of 1968 made affordable flood insurance possible through federally-subsidized programs. Property owners in Pima County may purchase flood insurance that will typically cover structures and their contents from losses due to flooding. Improvements such as fencing, walls, swimming pools, landscaping or small storage sheds, however, are usually not covered by this insurance.
If your home is in a federally-mapped floodplain and you finance it with a loan backed by the federal government, then flood insurance is mandatory. Even when not required by law, the District always recommends purchasing flood insurance. Many flood damaged structures are located outside of federally mapped floodplains. When you are planning to purchase a new home or property always confirm the floodplain status of the property before you purchase the property. You can do this yourself by contacting our office. Please note that real estate agents are only required to determine if a property is within a federally mapped floodplain, so if your realtor provides flood information to you, be sure to verify whether or not the realtor has determined if the property is impacted by locally mapped floodplains. Additional information on flood insurance can also be obtained from FEMA.
Flood Insurance &
The National Flood Insurance Program
What is the National Flood Insurance Program (NFIP)?
The NFIP is a federal program that enables property owners to purchase flood insurance and is intended to curb escalating costs of repairing flood damaged buildings and their contents. Until NFIP was enacted, this type of coverage was generally not available from private-sector insurance companies.
Why was the NFIP established by Congress?
The United States Congress created the NFIP in response to an increasing number of flood losses and the increasing cost of disaster relief that was being borne by all taxpayers. For decades, the national response to flood disasters was generally limited to constructing flood control works such as dams, levees, sea walls, and the like and to providing disaster relief to flood victims after a flood event. This approach did not reduce losses, nor did it discourage unwise development in flood prone areas. To compound the problem, property owners generally could not buy flood coverage from private insurance companies. Building techniques to reduce flood damage also were often overlooked.
The intent of NFIP is twofold: 1) to minimize future damage from flood events, and; 2) to provide property owners with protection from flood losses through an insurance program. Costs of the insurance are paid by those most in need of, and potentially benefiting from, this protection.
Am I required to obtain flood insurance?
Federally insured lenders are required by the Flood Disaster Protection Act of 1973 to have flood insurance on properties with structures located in a Special Flood Hazard Areas (SFHA), or what is more commonly referred to as the 100-year floodplain. Lenders pass that insurance requirement to the property owners.
How can I purchase flood insurance for my property?
Your regular homeowner's or business insurance policy probably does not cover losses due to floods. However, because Pima County participates in the NFIP, you can buy special flood insurance to cover your home and its contents from flood damage. Contact your local insurance agent, or any licensed property insurance agent or broker to obtain flood insurance coverage.
What types of property may be insured against flood loss?
NFIP coverage is available for all owners and occupants of insurable property (a building and/or its contents) in a community participating in the NFIP. Owners as well as renters may insure their personal property against flood loss. Buildings in the process of being constructed, condominium associations, and owners of residential condominium units may all purchase flood insurance.
Almost every type of walled and roofed building that is mostly above ground and not situated entirely over water may be insured. In most cases, this includes manufactured or mobile homes that are anchored to permanent foundations. Travel trailers, converted buses or vans, however, are typically not covered. As with other structures, the contents within insurable buildings also may be insured under separate coverage.
What flood losses are covered?
Your individual policy will specify the kind and amount of coverage it provides. Direct physical losses resulting from flood events are covered, as are losses due to flood-related erosion. Damages caused by mudslides are also usually covered.
In certain cases, NFIP will pay claims on insured buildings that are subject to imminent collapse due to erosion in order that the building can either be demolished or relocated before any damage occurs. Specific requirements must be met for such claims to be paid, and the amounts of payment are subject to specific limits.
Are there certain buildings that cannot be covered?
Flood insurance is not available for buildings which the Federal Insurance Administrator determines have been declared to be in violation of state or local floodplain management regulations or ordinances. No new policies can be written to cover such buildings, nor can an existing policy be renewed.
How are flood insurance premiums calculated?
A number of factors are used to determine premium rates for flood insurance coverage. They include: the amount of coverage purchased, the location, the age and design of the building, building occupancy, and for buildings in Special Flood Hazard areas, building elevation. Only single-family and 1-4 family dwellings in Zones C, D, and X indicated on Flood Insurance Rate Maps are eligible for preferred risk coverage at reduced premium rates. Certain loss limitations are in effect for these buildings, depending on the amount of insurance purchased. See FloodSmart.gov for more details.
Flood Insurance Questions Involving Letters of Map Revision (LOMRs)
If my property is removed from the 100-year floodplain, does that mean it will never flood?
No. The 100-year flood has a one percent chance of occurring during any given year; storms do occur that have intensities that result in floods greater than the 100-year flood. Be aware the Flood Insurance Rate Maps only reflect federally mapped floodplains. They do not reflect local or tributary floodplains. Property owners are encouraged to inquire with the Floodplain Management Division of the District to determine if their property is impacted by locally mapped floodplains or un-mapped tributaries.
Can I drop my flood insurance if my residence or business is removed from the SFHA?
The Flood Disaster Protection Act of 1973 directs federally regulated lenders to require flood insurance on loans secured by a building located in a SFHA. Once an area has been removed from a SFHA, the lender is no longer mandated by the National Flood Insurance Reform Act to require flood insurance. However, even if your structure has been removed from the mapped floodplain, flood insurance is recommended by the District and FEMA. Revised flood zone designations or newer base flood elevations may result in lower insurance premiums.
Can I get a refund on the flood insurance I have paid once my residence or business has been removed from the SFHA?
Property owners whose buildings have been removed from a SFHA may be eligible for a one-year premium refund. Your lender must provide you with a letter agreeing to remove the requirement for flood insurance. If your lender refuses to send you a letter stating that they will not require flood insurance, or if you do not have a lender, you will not be eligible for a refund. To find out if you may be eligible for a refund, please follow these steps:
- Once the Letter of Map Revision (LOMR) is available the District will make the documentation available through this website or at our office. Review the revised flood maps to determine if your structure has been removed from the SFHA. If your property has been or will be removed from the SFHA, please follow steps 2 through 5.
- Obtain a copy of the LOMR after it has become effective.
- Send your lender a copy of the LOMR along with a written request asking for a new flood map determination for your building based on the revision. Some lenders may charge a fee for this service. Ask the lender for a written confirmation to include the following:
- Flood insurance was required originally as a condition of the loan.
- Flood insurance is no longer required based on the new FIRM.
- If your lender purchased the flood insurance policy for you, ask the lender to cancel the flood insurance policy and issue you a refund. Many of the policies purchased by lenders are not written through the National Flood Insurance Program and have a range of different refund standards. Owners should check with their lenders to determine what refund standards apply.
- If you purchased your flood insurance policy directly from an insurance agency, then ask your lender to provide you with a letter removing the requirement to carry flood insurance, and send a copy of the letter along with a copy of the LOMR to your insurance agent asking to have the policy cancelled. A full refund of the premium is provided for the policy year in which the new LOMR became effective provided the policy is currently active and there are no claims pending.
What if my lender requires me to carry flood insurance even if my residence or business is outside the 100-year floodplain?
A few lenders may still require flood insurance based on their lending policies even when a structure lies outside the 100-year floodplain. If a residence or business has been removed from the floodplain, premiums paid on flood insurance should be decreased to reflect the lower flood risk.
Can I still obtain flood insurance if my home/business is removed from the mapped floodplain?
Yes. Flood insurance can be purchased and is recommended even if you’re not in a SFHA. Additionally, flood insurance premiums are lower in non-SFHA areas.
How can I save money on flood insurance if my residence/business is going to be added to a SFHA?
If your property is going to be added to a designated SFHA as a result of the LOMR, you should be aware that there may be a substantial savings in your flood insurance premium if you purchase your flood insurance prior to the effective date of the LOMR. Such lower rates are referred to a Preferred Risk Rates. Flood insurance is very reasonably priced for non-SFHA areas, so purchasing insurance before your residence or business is shown as being in a SFHA allows you to lock in a lower rate. Insurance can be purchased from your local insurance agent. If you do not have an agent who can write a flood policy for you, you may call 1-800-427-4661 or visit www.floodsmart.gov to obtain the names and telephone numbers of insurance agents in your area.
If I obtain flood insurance at a lower rate, can I transfer that lower rate to future property owners?
Yes. Flood insurance policies are assignable. If you sell your property in the future, the flood insurance rate may be transferred to a new buyer if the flood insurance coverage is included as part of escrow. For information, please contact your insurance agent.
Community Rating System
The National Flood Insurance Program's Community
Rating System (CRS) is designed to recognize and reward communities such as Pima County
that work to reduce flood damages through various floodplain management
and flood awareness activities. Administered by the Federal
Emergency Management Agency (FEMA), the program can significantly reduce
flood insurance premiums paid by local property owners.
Some of the District activities recognized in the CRS program include:
- Reducing potential flood damages to existing buildings, especially
those that have incurred repeated flood damages in the past
- Improving management of developing areas that are not
mapped by the National Flood Insurance Program
- Requiring greater protection than the minimum standards set by the
National Flood Insurance Program
- Providing community-wide flood emergency response services
- Helping residents to obtain more information about flooding and flood
insurance
By providing enhanced customer services and implementing higher regulatory standards, the District’s participation in the CRS allows residents of unincorporated Pima County to obtain lower flood insurance rates. In 2007, the FEMA announced that Pima County achieved a CRS Class 5 rating (PDF format). This rating resulted in a 25% reduction in flood insurance premiums for properties within the Special Flood Hazard Areas (SFHAs) and a 10% reduction for properties outside SFHA’s. This new designation puts Pima County in the top five percent of the 1049 communities currently participating in the CRS nationwide.
Data available at the FEMA Policy & Claim Statistics for Flood Insurance web page shows that 2503 policies were in force within unincorporated Pima County as of June 30, 2011. These policies provide $562,725,100 in coverage at an annual premium cost of $1,598,430. Countywide the average premium is $689 while being just $639 within unincorporated areas. While the premiums are $50 lower in unincorporated Pima County, the average insurance coverage amount is actually $4,787 higher, so residents of unincorporated Pima County are getting more coverage at less cost than residents within incorporated areas. While this added value is not entirely the result of the District’s excellent CRS rating, it is a factor and these savings are significant.
