Flood Insurance Requirement

About the Mandatory Purchase of Flood Insurance

The NFIP: The National Flood Insurance Program (NFIP) is a federal program enabling property owners in participating communities to purchase flood insurance on eligible buildings and contents, whether they are in or out of a floodplain. This community participates in the NFIP, making federally backed flood insurance available to its property owners.

The NFIP insures most walled and roofed buildings that are principally above ground on a permanent foundation, including mobile· homes, and buildings in the course of construction . Property owners can purchase building and contents coverage from any local property and casualty insurance agent. To find a local insurance agent that writes flood insurance in your area visit www.floodsmart.gov

Mandatory Purchase Requirement: Pursuant to the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994, the purchase of flood insurance is mandatory for all federal or federally related financial assistance for the acquisition and/or construction of buildings in Special Flood Hazard Areas (SFHAs). An SFHA is defined as any A or V flood zone on a Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM).
The mandatory purchase requirement also applies to secured loans from such financial institutions as commercial lenders, savings and loan associations, savings banks, and credit unions that are regulated, supervised, or insured by federal agencies, such as the Federal Reserve, the Federal Deposit Insurance Corporation, the Comptroller of Currency, the Farm Credit Administration, the Office of Thrift Supervision, and the National Credit Union Administration. It further applies to all loans purchased by Fannie Mae or Freddie Mac in the secondary mortgage market.

Federal financial assistance programs affected by the laws include loans and grants from agencies such as the Department of Veterans Affairs, Farmers Home Administration, Federal Housing Administration, Small Business Administration, and FEMA disaster assistance.

How it Works: When making, increasing, renewing, or extending any type of federally backed loan, lenders are required to conduct a flood zone determination using the most current FEMA FIRM to determine if any part of the building is located in an SFHA. If the building is in an SFHA, the federal agency or lender is required by law to provide written notification to the borrower that flood insurance is mandatory as a condition of the loan. Even though a portion of real property on which a building is located may lie within an SFHA, the purchase and notification requirements do not apply unless the building itself , or some part of the building, is in the SFHA. However, lenders, on their own initiative, may require the purchase of flood insurance even if a building is located outside an SFHA. Up to 25% of all NFIP flood losses arise from outside SFHAs (B, C, and X Zones).

Under federal regulations, the required coverage must equal the amount of the loan (excluding appraised value of the land) or the maximum amount of insurance available from the NFIP, whichever is less. The maximum amount of coverage available for a single-family residence is $250,000 and for non-residential (commercial) buildings is $500,000. Federal agencies and regulators, including government-sponsored enterprises, such as Freddie Mac and Fannie Mae, may have stricter requirements.

ATTENTION
Homeowner’s insurance policies do not usually cover damage from floods. However, because City of Oceanside participates in the National Flood Insurance Program (NFIP), you can purchase a separate flood insurance policy. This insurance is backed by the Federal Government and is available to everyone, even for properties that have been flooded.

If your area is not mapped as a SFHA, you may qualify for a preferred Risk Policy, which has special low premium.

Don’t wait for the next flood to buy insurance protection. There is a 30 day waiting period before National Flood Insurance Program coverage takes effect.

FEMA’s
FLOOD INSURANCE RATE MAPS


My Lender is requiring me to purchase Flood Insurance


Options for Oceanside Residents

This document is intended to help Oceanside residents who have been contacted by their lenders requiring them to purchase flood insurance, to meet the requirements of FEMA’s National Flood Insurance Program (NFIP) and what to do if they believe they are not actually located in the floodplain.

 The Federal requirement, as regulated by FEMA, for the purchase of flood insurance is based on the answers to two key questions:

  • Is there a federally regulated mortgage load on the property with a structure as collateral? Yes/No
  • Is the structure located in a Special Flood Hazard Area (SFHA) as mapped on the current produced by the Federal Emergency Management Agency (FEMA)? Yes/No

The Special Flood Hazard Area (SFHA)

The FEMA SFHA is the land area covered by the floodwaters of the flood having a 1% chance of occurring in any given year. It is the area where the mandatory purchase of flood insurance applies if there is a federally regulated mortgage loan. The SFJA is also referred to as the high hazard are and includes flood zones AE, AO, VE and A.

 

If the answer to both questions is YES, then the lender is required by Federal regulations to ensure that a flood insurance policy is purchased to cover potential flood damages to the building

 

 

What are my options if I believe I do not need flood insurance and my property is not at high risk from flooding?

 

Lender disputes generally fall into one of two categories

  • A structure/property that is outside of the mapped FEMA SFHA boundary as shown on the current FEMA FIRM;
  • A structure/property shown within the FEMA SFHA but due to mapping limitations, submittal of elevation data may result in the structure/property being removed from the FEMA SFHA.


Your lender makes the initial flood zone determination using the most current FEMA FIRM to determine whether a structure is in an FEMA SFHA. However, the FEMA FIRM is limited by the topographic mapping available in the area as well as the scale of the mapping. These limitations can result in inaccuracies in the FEMA SFHA boundaries on the FEMA FIRM. A property owner can question the mandatory purchase requirement by submitting more detailed, property-specific information directly to FEMA.

FEMA will review this information and if appropriate, will issue a determination to the owner that will remove the structure from the FEMA SFHA. This is referred to as the Letter of Map Amendment (LOMA) process. The owner is responsible to provide the LOMA to the lender. Refer to the section ‘How do I determine which flood zone my property is located in?’ below to learn if the LOMA process is the right option for your property.

OCEANSIDE Updated FIRM 

An updated FEMA FIRM for Oceanside became effective on May 16, 2012. This was part of a nationwide mapping update conducted by FEMA. As a result of this update, the FEMA FIRM has been converted to a digital format and previously issued Letters of Map Revision have been incorporated.

Additionally, while no flood hazards were restudied within the City of Oceanside, elevations on the FIRM have been converted to reflect the North American Vertical Datum of 1988. A vertical datum provides a starting point against which flood, ground, and structure elevations can be referenced and compared. A change in vertical datum in and of itself will have no affect on a previously issued LOMA determination. To learn more about datum conversions, contact the FEMA Map Information eXchange at 1-877-FEMA-MAP.


 

 

I previously obtained a LOMA for my property. However, since the FEMA FIRM was recently updated, my lender is requiring me to buy flood insurance.


When an updated FEMA FIRM is prepared for a community, FEMA reviews all existing approved LOMAs to determine if they will remain valid. If updated flood hazard information has been developed, it may supersede a LOMA. If this is the case, the LOMA will no longer be valid and the mandatory flood insurance requirement will apply. However, if FEMA determines that the LOMA will remain valid because there was no change in the flood hazard information in the vicinity, or the property still remains above any new Base Flood Elevation (BFE) which has been established, it will be included on the revalidation letter sent to the community by FEMA and will continue to be approved.

To obtain a copy of the Oceanside revalidation letter: Please check

  • The FEMA Map Information eXchange (FMIX) toll-free at 1-877-FEMA-MAP (all County of San Diego communities).

Locate your LOMA case number on the revalidation letter, provide a copy to your lender and explain that FEMA has revalidated your LOMA case. If your LOMA is not included on the revalidation letter and you believe it was incorrectly omitted, contact FMIX immediately.

Need assistance locating your property on the FIRM or have other questions?


The FEMA Map Information eXchange toll-free at 1-877-FEMA-MAP

OR

Contact the City of Oceanside Engineering Division at (760) 435-5086 or (760) 435-5073.

 

 


 How do I determine which flood zone my property is located in?

To determine the flood zone for your property or the closest floodplain to your property, visit the FEMA Map Service Center (MSC) at www.msc.fema.gov. Once you locate your property, the flood zone will correspond to one of the following zones: AE, AO, VE, A (high hazard areas which comprise the SFHA); or X (low to moderate hazard areas, including the 0.2% annual chance floodplain).

Next, please refer to the section indicated below based on the zone that affects your property:

Zone X: Go to Section A

Zone AE/AO: Go to Section B

Zone VE: Go to Section C

Zone A: Go to Section D

 

A. My structure is entirely within a Zone X Flood Zone (Low to Moderate Hazard) 

The Zone X floodplain is a low to moderate hazard area where flood insurance is not required if you have a federally backed loan. If you are confident that your entire structure is in the Zone X area, you have two options to dispute the requirement for flood insurance

  1. Using the FEMA MSC website referenced above, print out the portion of the map showing the location of your property and the FIRM floodplains. Contact your lender and explain that you have a map containing the FIRM information which shows the structure entirely in Zone X, and ask if they will perform a re-determination for your property. If the lender will perform a re-determination, send the lender the copy of the map showing the front of the map panel including the title block and map panel number and marked with the specific location of your structure.



  2. If the lender will not perform a re-determination, then you will need to submit an application to FEMA requesting FEMA's determination for your structure through the LOMA or Letter of Determination Review (LODR) process. The application for this process is available at: http://www.fema.gov/library/viewRecord.do?id=2328.
    FEMA will review your property information and send you a flood zone determination based on the information submitted. The FEMA determination is a legal document that can be sent to your lender for their review and evaluation in determining if the mandatory purchase requirement can be removed and will supersede any previous flood zone determination.

The property owner and lender may jointly request that FEMA review the lending institution's determination. This request must be submitted within 45 days of the date the lending institution notified the property owner in writing that the building was in a FEMA SFHA and flood insurance was required. FEMA will respond with a Letter of Determination Review (LODR). The LODR officially determines if the structure is in or out of a SFHA. There is an $80 fee to process a LODR. If the 45 day notification period has expired, the property owner can pursue a LOMA. Once a LODR or LOMA is received from FEMA, the property owner is responsible to provide the document to the lender for their review. Ultimately, it is the lender's prerogative whether they will remove the requirement for flood insurance based on the LODR or LOMA. 

 

 B. My structure is in or close to a Zone AE/AO Floodplain (High Hazard)

Zone AE floodplains on the FIRM have flood elevations known as Base Flood Elevations (BFEs) established. If the lowest adjacent grade elevation next to the structure and the lowest floor elevation of your structure are at or above the BFE, your structure may be a candidate for removal from the SFHA via the LOMA process. The application for a single structure LOMA can be found at: http://www.fema.gov/library/viewRecord.d o?id=2328.  

 

You must submit property specific information to support your LOMA request. The minimum data required include a legally recorded deed, a tax map showing the property location, the completed application form, and, for most requests, an elevation form or certificate completed by a licensed land surveyor or civil engineer. FEMA will review the submitted property information and send you their flood zone determination, based on the information provided in the application. The FEMA determination is a legal document that can be sent to your lender for their review and evaluation and supersedes any previous flood zone determination.

Zone AO floodplains on the FIRM are areas subject to shallow flooding between 1 and 3 feet deep and do not have specific BFEs. It is possible to dispute the requirement for flood insurance if your home is in a Zone AO. However there are usually additional data requirements as part of the LOMA process. Contact the Engineering Division at (760) 436-5086, or (760) 436-5073, to discuss the specifics of the data you will need to collect to potentially dispute a lender’s flood insurance requirement.



C. My structure is in or close to a Zone VE Floodplain (Coastal High Hazard)


Zone VE floodplains on the FIRM are coastal high hazard areas defined by high velocity wave action. Zone VE areas have special floodplain management requirements including the requirement to elevate buildings on piles or columns. The County of San Diego (unincorporated area) does not have any Zone VE floodplains; therefore, please contact the appropriate city jurisdiction to dispute the flood insurance requirement if your structure is located in a VE zone.


D. My structure is in or close to a Zone A Floodplain (High Hazard)

Zone A floodplains shown on the FIRM are high hazard areas known as approximate SFHAs. This means there are no BFEs associated with the SFHAs. City of Oceanside may have BFE data that FEMA will accept to consider your home for removal from the high hazard flood area. Contact the Engineering Division at (760) 436-5086, or (760) 436-5073 to determine if BFE data exists for the Zone A floodplain in the vicinity of your home. If no BFE data exists, a request can be made to FEMA to determine an appropriate BFE for your home as part of the LOMA process. The application for a single structure LOMA can be found at:  

http://www.fema.gov/library/viewRecord.do?id=2328.

FEMA strongly encourages all homeowners to consider purchaseing flood insurance. Approximately 25% of flood losses occur in areas outside the SFJA. Owners of home outside the SFHA and those who obtain LOMA removing the mandatory insurance requirement may be eligible for a Preferred Risk Policy for as low as $129/year. Ask your local insurance agent whether you are eligible for a Preferred Risk Policy 

You must submit property specific information to support your LOMA request. The minimum data required include a legally recorded deed, a tax map showing the property location, the completed application form, and, for most requests, an elevation form or certificate completed by a licensed land surveyor or civil engineer. FEMA will review the submitted property information and send you a flood zone determination based on the information provided in the application. The FEMA determination is a legal document that can be sent to your lender to be reviewed and evaluated by your lender and supersedes any previous flood zone determination.

 

Challenging the Lender's Map Determination

Communities should be aware that the ultimate decision on whether flood Insurance is required rests with the lender. Lenders are permitted to rely on third-party vendors for flood zone determinations provided that those vendors guarantee the accuracy of their determinations. Communities are not considered third-party vendors nor are they expected to assume the lender's responsibility. See also Figure 320-3
However, if there is a flood zone discrepancy among the parties involved, community officials often are contacted to provide assistance and documentation to clarify the flood zone for the building in question. The CRS encourages communities to help their residents. The community staff that provides the map information service should be familiar with the mandatory purchase requirements and the following processes available to property owners to resolve a flood zone dispute.

1) Talk to the lender - The first step should always be to talk to the lender and demonstrate that the building Is not In the Special Flood Hazard Area (SFHA). The community can help, by supplying a printout of the FIRM showing the building's location. If the lender's decision is based on information from a flood zone determination company, the inquirer can ask the lender to request a manual determination. Often determinations are made by a computer, so a manual determination may result in a different finding.

2) Letter of Map Amendment-Out as Shown (LOMA-OAS) - Occasionally, a parcel or Individual structure may be incorrectly determined to be located within the SFHA because of imprecise map delineations. A property owner may submit property and elevation materials to FEMA In support of a request for a LOMA Where the FIRM is based on an aerial photograph and the building is clearly shown as ou1side the SFHA, this can be a relatively simple approach.

3) Letter of Determination Review (LODR) - This process is meant to be used to determine whether the FIRM was read correctly. The borrower and lender can jointly submit a review request to FEMA during the 45-day period after the borrower is notified that flood insurance is required.
After reviewing the required supporting technical documentation, within 45 days after receiving the completed package, FEMA will issue a written determination, a LODR, indicating its concurrence or disagreement with the original determination made by the lender or third party, and stating whether the FIRM indicates that the subject buildings in the SFHA. FEMA will assess a flat fee to cover the costs of this review.

4) Letter of Map Amendment (LOMA) - Sometimes the flood map will show a structure as clearly being within an SFHA, even though the building on the property Is on ground that is above the base flood elevation. FIRMs may not reflect every rise in terrain, so there may be Instances of •natural islands" of high ground that are advertently included In the SFHAs. A property owner may submit property and elevation materials in support of a request for a LOMA to remove the property from the SFHA.

More details about these letters can be found at:



http://www.fema.gov/letter-map-amendment-letter-map-revision-based-fill-process

The Privacy Act

Flood insurance data about private property, including repetitive loss properties, are protected by Privacy Act. Personally identifiable information such as the names or addresses of specific properties, whether they are covered by flood insurance or not, whether they have received flood insurance claims, or the amount of such claims may not be released outside of local government agencies or to the public or used for solicitation or other purposes. Such information should be marked “for internal Use Only”. Protected by the Privacy Act of 1974.
General or aggregated information, such as total claims paid for a community or an area or data not connected to a particular property may be made public.

Challenging the Lender's Map Determination
Communities should be aware that the ultimate decision on whether flood Insurance is required rests with the lender. Lenders are permitted to rely on third-party vendors for flood zone determinations provided that those vendors guarantee the accuracy of their determinations. Communities are not considered third-party vendors nor are they expected to assume the lender's responsibility. See also Figure 320-3
However, if there is a flood zone discrepancy among the parties involved, community officials often are contacted to provide assistance and documentation to clarify the flood zone for the building in question. The CRS encourages communities to help their residents. The community staff that provides the map information service should be familiar with the mandatory purchase requirements and the following processes available to property owners to resolve a flood zone dispute.


1) Talk to the lender - The first step should always be to talk to the lender and demonstrate that the building Is not In the Special Flood Hazard Area (SFHA). The community can help, by supplying a printout of the FIRM showing the building's location. If the lender's decision is based on information from a flood zone determination company, the inquirer can ask the lender to request a manual determination. Often determinations are made by a computer, so a manual determination may result in a different finding.

2) Letter of Map Amendment-Out as Shown (LOMA-OAS) - Occasionally, a parcel or Individual structure may be incorrectly determined to be located within the SFHA because of imprecise map delineations. A property owner may submit property and elevation materials to FEMA In support of a request for a LOMA Where the FIRM is based on an aerial photograph and the building is clearly shown as ou1side the SFHA, this can be a relatively simple approach.

3) Letter of Determination Review (LODR) - This process is meant to be used to determine whether the FIRM was read correctly. The borrower and lender can jointly submit a review request to FEMA during the 45-day period after the borrower is notified that flood insurance is required.
After reviewing the required supporting technical documentation, within 45 days after receiving the completed package, FEMA will issue a written determination, a LODR, indicating its concurrence or disagreement with the original determination made by the lender or third party, and stating whether the FIRM indicates that the subject buildings in the SFHA. FEMA will assess a flat fee to cover the costs of this review.

4) Letter of Map Amendment (LOMA) - Sometimes the flood map will show a structure as clearly being within an SFHA, even though the building on the property Is on ground that is above the base flood elevation. FIRMs may not reflect every rise in terrain, so there may be Instances of •natural islands" of high ground that are advertently included In the SFHAs. A property owner may submit property and elevation materials in support of a request for a LOMA to remove the property from the SFHA.

More details about these letters can be found a

t: http://www.fema.gov/letter-map-amendment-letter-map-revision-based-fill-process