Click on a question to be directed to the corresponding answer on this page. These questions and their accompanying answers originate from the following sources:
(FIA) – Flooding in Iowa videos. Contents derived from multiple sources including FEMA and IDNR
Q: What does a community need to do in order to participate in the NFIP? Is there much work involved in administrating the program?
Q: What is a 100-year flood” and how is it different from a “1-percent-annual-chance flood” or a “base flood?”
Q: How can a property owner determine whether or not his property is located in a Special Flood Hazard Area?
Q: The FEMA floodplain map for my community shows my structure to be in the Special Flood Hazard Area. Are there any options to change the map?
Q: I was told I need to obtain a Base Flood Elevation in order to complete the MT-EZ form. Where can I obtain such an elevation?
Q: What if a borrower disagrees with their lender’s determination that a property is in a flood zone?
Q: How do Iowa’s regulations for elevating the lowest floor of a building above base flood differ from the National Flood Insurance Program?
Q: Does elevating a structure on posts or pilings remove a building from the Special Flood Hazard Area?
Q: Why are substantial damages and substantial improvements important and how might they affect my property?
Q: Why is there a requirement to purchase flood insurance in communities that have not suffered flooding in many years, or ever?
Q: Why is my lender requiring me to purchase flood insurance when my structure is not located in the Special Flood Hazard Area?
Introduction to the NFIP
Q. Why was the National Flood Insurance Program (NFIP) established by Congress? (FEMA)
A. For decades, the national response to flood disasters was generally limited to constructing flood-control works such as dams, levees, seawalls, and providing disaster relief to flood victims. This approach, however, did not reduce losses, nor did it discourage unwise development. In some instances, it may have actually encouraged additional development. To compound the problem, due to its high risk and seasonal nature, insurance companies were not able to provide affordable flood insurance coverage.
In light of mounting flood losses and escalating costs of disaster relief to the taxpayers, the U.S. Congress created the National Flood Insurance Program (NFIP). The intent was to reduce future flood damage through the adoption and enforcement of community floodplain management ordinances, and to provide protection for property owners against potential losses through an insurance mechanism that requires a premium to be paid for the protection.
Q: How does the NFIP benefit property owners? Taxpayers? Communities? (FEMA)
A: Through the NFIP, property owners in participating communities are able to insure against flood losses. By employing wise floodplain management, a participating community can reduce risk and protect its citizens and the community against much of the devastating financial losses resulting from flood disasters. Careful local management of development in the Special Flood Hazard Area results in construction practices that can reduce flood losses and the high costs associated with flood disasters to all levels of government.
Q: Other than flood insurance, what other benefits come with participating in the NFIP? (IDNR)
A: Federal grants and loans from Federal agencies such as the Environmental Protection Agency, Housing and Urban Development, Federal Housing Authority, Veteran’s Assistance, Farmer’s Home Administration, Small Business Administration, and Fannie Mae and Freddie Mac are made available for properties located in the Special Flood Hazard Area of communities that participate in the NFIP.
Q: What is the definition of a community? (FEMA)
A: A community, as defined for the purpose of the NFIP, is any state, area, or political subdivision; any Indian tribe, authorized tribal organization, or Alaska native village; or authorized native organization that has the authority to adopt and enforce floodplain management ordinances for the area under its jurisdiction. In most states, a community is an incorporated city, town, township, borough, or village, or an unincorporated area of a county or parish. Under the law of some states, however, other governmental entities may qualify as “communities.”
Q: How does the definition of ‘community’ apply in Iowa? (IDNR)
A: In Iowa, a ‘community’ is any city or county.
Q: Are communities required to participate in the NFIP? (IDNR)
A: Communities are not required to participate in the NFIP; however, if a community chooses not to participate property owners in that community will not be able to purchase federally-backed flood insurance. In addition, federal grants, loans, disaster assistance, and federal mortgage insurance are unavailable for the acquisition or construction of structures in the Special Flood Hazard Area shown on the NFIP maps.
Q: What does a community need to do in order to participate in the NFIP? Is there much work involved in administrating the program? (IDNR)
A: Communities are required to enforce a floodplain management ordinance and appoint a local official to administer the ordinance. The appointed local official is required to issue permits for development within the Special Flood Hazard Area to ensure life and property are reasonably safe from flooding. From time to time, local officials must inspect the Special Flood Hazard Area to ensure no new development is being built in violation of the ordinance.
A: Nothing. Communities do not pay any fees to join the NFIP. All that is required for a community to join is that it adopt and enforce a floodplain management ordinance that regulates development within the Special Flood Hazard Area identified on a FEMA flood insurance rate map.
A: To determine the participation status of a particular community, you can check with the floodplain administrator in that community or you can look up the community in the Community Status Book (CSB) on the NFIP website at http://www.fema.gov/national-flood-insurance-program-community-status-book (web address current as of June 2016). The CSB includes the status of participating communities, and nonparticipating communities that have flood maps, effective dates of the current map index, and Community Identification Numbers.
A: FEMA can sanction communities by placing them on probation or suspending them from the NFIP. Probation is the first step towards suspension and gives communities time to bring violations into compliance with the ordinance. During probation, policyholders will see a $50 surcharge on their flood insurance premiums when a policy is renewed or issued. If communities neglect to address violations during probation, FEMA will place them on suspension. When communities are suspended, policies will not be renewed or issued. Property owners located within the Special Flood Hazard Area will not receive federal disaster assistance or federally-insured loans or financing while the community is suspended.
A: Probation is a FEMA-imposed change in a community’s status resulting from violations and deficiencies in the administration and enforcement of NFIP local floodplain management regulations.
A community can be placed on probation ninety days after FEMA provides written notice to community officials of specific deficiencies. Probation generally is imposed only after FEMA has consulted with the community and has not been able to resolve deficiencies. Probation may be continued for up to one year after the community corrects all program deficiencies and remedies all violations to the maximum extent possible.
A: A surcharge is added to the premium for each policy sold or renewed in the community. The surcharge is effective for at least one year after the community’s probation period begins. The surcharge is intended to focus the attention of policyholders on the community’s noncompliance to help avoid suspension of the community, which has serious adverse impacts on those policyholders. Probation does not affect the availability of flood insurance.
A: Suspension of a participating community occurs when the community fails to adopt an adequate ordinance, including adopting the most current FIRMs. The community is provided written notice of the impending suspension and granted thirty days in which to show why it should not be suspended. Suspension is imposed by FEMA. FEMA may suspend a participating community when the community fails to enforce its floodplain management regulations, for failure to adopt compliant floodplain management measures, or if it repeals or amends previously compliant floodplain management measures. New flood insurance coverage cannot be purchased and policies cannot be renewed in a suspended community. Policies in force at the time of suspension continue in force for the policy term. If the community is suspended following a period of probation, the community is provided written notice of the impending suspension and granted 30 days in which to show why it should not be suspended.
A: Yes. Iowa Code Chapter 455B, Section 262A requires that all communities with FEMA identified Special Flood Hazard Areas (SFHAs) within their political boundaries must participate in the NFIP. Communities that currently do not have an effective flood map that identifies SFHAs within their political boundaries, must join the NFIP within two-years from the effective date of any future flood map in order to be eligible to receive state financial assistance for future flood-related disasters. This also applies to communities applying for mitigation grants.
A: A watershed’s total size, maximum and minimum elevations, shape, slope, and drainage patterns are all important factors that affect drainage and flooding. Knowing these factors can help hydrologists – scientists who study moving water – estimate flood potential.
A: The width of a floodplain depends on many factors, including topography, the size of the watershed being drained by the river, the volume and velocity of water carried by the river, the frequency of flooding, and the nature of the soils found in the watershed.
A: Floodplains can reduce the number and severity of floods by providing a broad area for flood waters to spread out and temporarily store flood waters. This reduces downstream flood peaks and velocities. Also, in their natural vegetated state, floodplains slow the rate at which incoming overland flow reaches the river channel. Floodplains also filter nutrients and other impurities from flood waters, and provide habitat for insects, birds, reptiles, amphibians, and mammals. Additionally, vegetated floodplains provide shade for the adjacent rivers and streams, cooling the water, increasing dissolved oxygen levels and consequently improving habitat for aquatic plants and animals.
Communities that view floodplains as natural assets instead of problem areas to be “engineered” out of existence benefit from the results. Parks, bike paths, open spaces, and wildlife conservation areas make communities more appealing to citizens, potential employers, property owners, and visitors.
A: The most common type of flooding in Iowa is riverine flooding, which occurs when a river channel receives more rain or snowmelt from the watershed than it has capacity to hold. However, thereare other types of flooding not associated with rivers that can cause just as much damage. Sheet flow, ponding, and flooding from urban storm water systems also pose risks of flood damage.
A: Flash flooding is caused by extreme rainfall that occurs over a short period of time. Flash floods often occur in smaller watersheds and in rivers with steep slopes and narrow stream valleys where water velocities are high and warning times are short. It may also occur, or be more severe in urban areas, where impervious surfaces such as roofs, streets, and parking lots convert nearly all rainfall from a severe storm into surface runoff. Understanding and awareness of flash flooding is critically important because flash flooding causes the most flood-related deaths annually in the United States.
A: A Flood Insurance Rate Map (FIRM) is an official map of a community on which FEMA has delineated both the Special Flood Hazard Areas and the risk premium zones applicable to the community.
A: A Flood Hazard Boundary Map (FHBM) is based on approximate data and identifies the Special Flood Hazard Areas within a community. It is used in the NFIP’s Emergency Program for floodplain management and insurance purposes. A FIRM or Digital Flood Insurance Rate Map (DFIRM) is normally issued following a flood risk assessment conducted in connection with a community’s conversion to the NFIP’s Regular Program. If a detailed assessment, termed a Flood Insurance Study (FIS) has been performed, the FIRM will show Base Flood Elevations (BFEs) and insurance risk zones in addition to Special Flood Hazard Area boundaries. The FIRM may also show a delineation of the regulatory floodway. After the effective date of the FIRM, the community’s floodplain management ordinance must be in compliance with appropriate Regular Program requirements. Actuarial rates, based on the risk zone designations shown on the FIRM, are then applied for newly constructed, substantially improved, and substantially damaged buildings.
A: FEMA refers to the area inundated by the base flood as the Special Flood Hazard Area, or SFHA.
Q: What is a 100-year flood” and how is it different from a “1-percent-annual-chance flood” or a “base flood?” (FEMA)
A: The term “100-year flood” is misleading. It is not the flood that will occur once every 100 years; rather, it is the flood that has a one percent chance of being equaled or exceeded annually. It is based on probabilities, not predictions. Thus, the 100-year flood could conceivably occur multiple times in a year, or not at all over a period of 150 years or more. Because the term “100-year flood” is misleading, FEMA has also defined it as the one-percent-annual-chance flood. The “one-percent-annual-chance flood” is the term that is now used by most Federal and State agencies and by the NFIP.
A: The NFIP defines the Base Flood Elevation (BFE) as the elevation that floodwaters would reach at a particular location during the one-percent-annual-chance flood. The one-percent-annual-chance flood is also known as the “base flood.”Based on statistical probabilities, the base flood has a 1 out of 100 chance of occurring or being exceeded in any given year. The table below shows the relationship between the different terms used by the NFIP to describe the same concepts.
…means the same as…
…and NFIP terminology.
100-year flood level
1%-chance flood level
Base flood elevation (BFE)
Special Flood Hazard Area (SFHA)
Q: What are the different flood hazard zone designations shown on a FIRM, and what do they mean? (FIA)
A: The zone designations commonly shown on Iowa community FIRMs are defined below. Other flood zones will be found on the FIRMs of coastal communities.
- Zone Ais also known as the “unnumbered A zone.” Areas delineated with Zone A are special flood hazard areas that have been determined using approximate study methods. Because they are based on an approximate study they show no base flood elevations.
- Zones A1 through A30 are known as “numbered A zones.” These zones are the result of a detailed study. Numbered A Zones include the base flood elevation and floodway delineation. The number to the right of the letter A represents a risk factor that, at one time, was used for flood insurance rating purposes. The risk factor is based in part on the difference between the 10% chance and 1% chance flood profiles.
- Zone AE replaces numbered A zones on FIRMs produced or revised after 1986. The “E” stands for elevation, meaning it is the result of a detailed study. As with numbered A zones, a Zone AE includes the base flood elevation and floodway delineation.
- Zone AH represents an area of shallow flooding caused by ponding of flood waters where the average depth for the base flood event is between 1-3 ft. Zone AH is based on a detailed study and includes the base flood elevation.
- Zone AO represents an area of shallow flooding resulting from sheet flow where the average depth for the base flood event is between 1-3 ft. Zone AO is determined by a detailed study. Instead of a base flood elevation, however, the number to the right of AO provides the average depth of inundation at a location for the base flood event; for example, “AO2” indicates that the average depth of inundation is 2 ft.
- Zone AR represents areas formerly considered protected from flooding by a currently de-accreditedlevee or floodwall that is in the process of being rehabilitated to provide protection from the base flood or greater flood event. Zone A99 applies to those areas that will be protected by a Federal flood protection system under construction that has reached targeted construction and funding milestones.
- Zone A99 applies to those areas that will be protected by a Federal flood protection system under construction that has reached targeted construction and funding milestones. It should be noted that the community’s floodplain management regulations require a permit prior the any development in all types of A zones except A99. Lenders must also require the purchase of flood insurance as a condition of any loan for buildings located in any type of A zone, including A99.
- Zone D represents areas where no flood hazard analysis has been conducted. D zones are considered to be areas of possible but undetermined flood hazards.
- Zone Bis found on maps produced before 1986, and is labeled on newer maps as a shaded Zone X. It generally denotes the areas with a two-tenths percent annual chance of flooding, also known as the 500-year floodplain. It may also be used to indicate certain areas subject to the base flood where the average depths are less than one foot, or areas where the contributing drainage area is less than one square mile. They can also be used to identify areas that are protected from the base flood event by an accredited levee or floodwall. Zone B and shaded Zone X are important when siting critical facilities.
- Zone C and unshaded Zone X are areas generally considered to have minimal risk from flooding. They typically refer to those areas that are determined to be outside the special flood hazard area. On FIRMs produced before 1986, these areas will be labeled as Zone C. FIRMs produced later will refer to these areas as an unshaded Zone X.
A: All the current effective flood maps are available online at FEMA’s Map Service Center (http://msc.fema.gov).
Additionally, if you live in a county that has received new digital flood maps you can view the floodplain data in Google Earth.To download the Google Earth application and FEMA’s National Flood Hazard Layer to go https://hazards.fema.gov/femaportal/wps/portal/NFHLWMSkmzdownload.
These web addresses are current as of April 2014. See Video 12 in the Flooding in Iowa series for specific information about how to access floodplain maps using these websites.
Q: How can a property owner determine whether or not his property is located in a Special Flood Hazard Area? (FEMA)
A: FEMA provides mapped communities with a single paper map of their community. The maps are generally kept in community planning or building permit departments where they should be available for review. In addition, digital flood maps can be viewed on FEMA’s Map Service Center website at http://msc.fema.gov. Property owners can also contact their insurance agent, who usually has access to FEMA maps or to a Flood Zone Determination service.
Q: The FEMA floodplain map for my community shows my structure to be in the Special Flood Hazard Area. Are there any options to change the map? (IDNR) (FEMA)
A: FEMA allows property owners who believe their property was incorrectly located in the Special Flood Hazard Area to apply for a Letter of Map Amendment (LOMA). A LOMA is a letter that officially revises an effective FEMA floodplain map and establishes that a specific property or building is not located in the Special Flood Hazard Area. The LOMA does not physically revise the map but rather amends the map. The letter is an official statement from FEMA stating that the specific property in question is not located in the Special Flood Hazard Area.
A: For buildings constructed before the publication of the first FEMA flood map that identified the structure as being in the Special Flood Hazard Area, it must be shown that the lowest ground elevation where it touches the foundation on the outside of the building – what FEMA refers to as the lowest adjacent grade – is above the base flood elevation. For structures built after the site was first designated as a Special Flood Hazard Area, it must be shown that the lowest adjacent grade and the lowest floor - including basement - is above the base flood elevation. An entire lot or parcel can be removed from the Special Flood Hazard Area if the lowest ground elevation within the boundaries of the parcel is at or above base flood elevation. FEMA requires that property owners hire a licensed surveyor or professional engineer registered in Iowa to obtain the surveyed elevations of the lowest adjacent grade in order to complete application. The surveyor will need to fill the form entitled MT-EZ on behalf of the property owner and submit it to FEMA. The MT-EZ form can be found at: https://www.fema.gov/mt-ez-form-instructions. This web address is current as of April 2014.
A: FEMA does not charge any fees to process and review MT-EZ forms for a LOMA. However, since FEMA requires property owners to obtain survey data to complete a LOMA, property owners are responsible for the cost of hiring a licensed surveyor or professional engineer registered in Iowa. Costs may vary for hiring surveyors or engineers depending upon their proximity to your locale.
Q: I was told I need to obtain a Base Flood Elevation in order to complete the MT-EZ form. Where can I obtain such an elevation? (IDNR)
A: A property owner located in an “A” Zone can contact the IDNR Floodplain Management Section and request a Base Flood Elevation (BFE) determination. To request a BFE send an email to BFERequest@dnr.iowa.govand include your contact information, property information, and an aerial map of the location.
Q: Is the surveyor required to complete an Elevation Certificate to accompany the MT-EZ form? (IDNR)
A: FEMA does not require a property owner to submit an Elevation Certificate in order process and review the MT-EZ form. Section B4 and B5 of the MT-EZ form asks for the effective panel map and elevation information. The surveyor can document the Base Flood Elevation (BFE) and the source of the BFE in Section B4 and the structure’s lowest adjacent grade or the property’s lowest lot elevation in Section B5 rather than complete an elevation certificate.
Q: What if a borrower disagrees with their lender’s determination that a property is in a flood zone? (FEMA)
A: Some lenders reserve the right in their loan documents to require the purchase of flood insurance regardless of the flood zone. Property owners may not contest the requirement if the lending institution has established the requirement as a part of its own standard lending practices. If the lending institution is requiring the insurance to meet mandatory flood insurance purchase requirements, however, 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 that a building or manufactured home is in the Special Flood Hazard Area and flood insurance is required. In response, FEMA will issue a Letter of Determination Review (LODR), which is a finding as to whether the building or manufactured home is in the Special Flood Hazard Area. A LODR does not result in an amendment or revision to the official flood map.
A: The Letter of Determination Review (LODR) does not result in an amendment or revision to the NFIP map. It only upholds or overturns the lender’s determination. The LODR remains in effect until the NFIP map panel affecting the subject building or manufactured home is revised. The LODR process does not consider the elevation of the structure above the flood level. It considers only the location of the structure relative to the Special Flood Hazard Area shown on the effective FIRM. FEMA confirms the location of the structure on the FIRM by examining the data source used by the lender to make the determination. A fee must be submitted with all LODR requests. The fee payment may be in the form of a check or money order, in U.S. dollars, made payable to the “National Flood Insurance Program.”
A: The Letter of Map Revision based on fill, or LOMR-F is appropriate when a structure or property has been elevated above the base flood elevation as a result of the proper placement and compaction of fill. For buildings, it must be shown that the lowest adjacent grade and the lowest floor - including the basement - is at or above the base flood elevation. To remove an entire property that has been filled from the special flood hazard area by a LOMR-F, it must be shown that the lowest ground elevation within the boundaries of the property - and the lowest floor including the basement of any building located on the property - are located at or above the base flood elevation.
A: The IDNR’s Floodplain Management Program has jurisdiction over streams that drain 2 square miles or more in incorporated areas and streams that drain 10 square miles or more in unincorporated areas. To determine if your project requires an IDNR permit call the Floodplain Management Section’s general technical assistance number at (866) 849-0321.
The U.S. Army Corps of Engineers has two major programs that give them permit authority over construction in the Special Flood Hazard Area: 1) regulation of discharge of dredged or fill materials into rivers, lakes, streams and adjacent wetlands and; 2) regulation of all construction activities on navigable waterways.
A: The regulatory requirements set forth by FEMA are the minimum measures acceptable for NFIP participation. More stringent requirements adopted by the local community or state take precedence over the FEMA minimum regulatory requirements established for flood insurance availability. FEMA supports state-initiated enforcement actions of higher standards by providing technical assistance and initiating FEMA enforcement actions where appropriate, as defined in 44 CFR §59.24. If a state chooses not to enforce its own regulations, FEMA shall limit its enforcement actions to compliance with NFIP criteria; or, after all technical assistance has been exhausted, FEMA may strongly suggest that the provision be omitted from state law until adequate progress can be shown that the provision is being fully enforced.
A: Most forms of “development” require a permit from either your local community or State and Federal authorities. If your community participates in the NFIP, the community adopted a floodplain management ordinance as a condition of joining the program. The ordinance regulates development in only the areas identified as Special Flood Hazard Areas on the FEMA map.
A: The NFIP defines development as “any man-made change to improved or unimproved real estate, including but not limited to buildings or other structures, mining, dredging, filling, grading, paving, excavation, drilling operations or storage of equipment or materials.” Any development in the Special Flood Hazard Area requires a floodplain development permit from the local community.
A: Local ordinances typically permit activities such as agricultural uses, recreational uses such as golf courses, residential uses such as lawns and parking areas, and other similar open space uses, so long as they do not include the placement of structures, fill, and other obstructions in the floodway. Other types of development may only be allowed when it is demonstrated that they will not result in any increase in flood stages. Applications for proposed development in the floodway must include certification by a registered professional engineer that the project will result in “no-rise” in the base flood elevation.
A: Local regulations allow most types of development in the Special Flood Hazard Area as long as the development satisfies the criteria outlined in the community’s floodplain management ordinance. The ordinances adopted by Iowa communities require buildings to be elevated one foot or more above Base Flood Elevation through the use of fill, piers, posts, or columns in order to be protected from damage by flood.
A: Buildings located in the Special Flood Hazard Area are elevated to ensure, among other things, that the development will not be damaged by the base flood event. Elevation is one method that is used to protect buildings located in the Special Flood Hazard Area from damage by flood, and it is the only acceptable method for protecting new or substantially-improved residential structures.
Q: How do Iowa’s regulations for elevating the lowest floor of a building above base flood differ from the National Flood Insurance Program? (FIA)
A: The building elevation requirements in Iowa are more stringent than those of the National Flood Insurance Program, which only requires the lowest floor to be elevated to the base flood elevation. The additional one foot above the base flood elevation required by the state of Iowa is known as freeboard, which is defined by the NFIP as a safety factor above a flood level for floodplain management purposes. Freeboard is the most common higher regulatory standard adopted by states and by communities that want to provide a margin of safety against flood risks. Requiring freeboard above the base flood elevation can help protect buildings from floods that are larger than the base flood event.
As of 2013, seven Iowa communities have elevation requirements for new and substantially improved buildings that exceed the minimum Iowa requirement of one foot above the base flood elevation. Six of those communities required three feet of freeboard above the base flood elevation.
Q: Does elevating a structure on posts or pilings remove a building from the Special Flood Hazard Area? (FEMA)
A: Elevating a structure on posts or pilings does not remove a building from the Special Flood Hazard Area. If the ground around the supporting posts or pilings is within the Special Flood Hazard Area, the building is still at risk. Ground saturation can lead to decreased load-bearing capacity of the soil supporting the posts or pilings, which can lead to partial or full collapse of the structure. Flood insurance will be required as a condition of receipt of Federal or federally regulated financing for the structure. FEMA recommends securely elevating structures above the Special Flood Hazard Area to reduce the risk to life and property, and has established a rating structure that could result in significant savings in premium costs for those who elevate.
A: The NFIP defines a basement as any enclosed area of a building, including any sunken room or sunken portion of a room, which has a floor that is below ground level on all four sides. This is important because what is typically referred to as a “walkout basement” is not considered to be a basement as defined by the NFIP because it does not have a floor that is below ground level on all sides. The lowest floor of a building with a “basement” is the floor of the basement. As a result, the floor of the basement (lowest floor) must be elevated at least one foot above base flood elevation.
Q: Why are substantial damages and substantial improvements important and how might they affect my property? (FIA)
A: If a structure is “substantially damaged,” the community’s floodplain ordinance requires that substantially damaged structures be repaired in compliance with the requirements of a community’s floodplain management regulations for new buildings. This typically requires elevating the structure’s lowest floor – including basement – to at least one foot above the elevation of the base flood event. This can be expensive for a property owner, but it is also one of the most effective means of reducing the risks of future flood-related damages. Buildings that are “substantially improved” are also required to come into compliance with the floodplain management regulations for new buildings.
A: “Substantial improvement” means any rehabilitation, addition, or other improvement of a building when the cost of the improvement equals or exceeds 50 percent of the market value of the building before start of construction of the improvement. The term includes buildings that have incurred “substantial damage,” which means damage of any origin sustained by a building when the cost of restoring the building to its pre-damaged condition would equal or exceed 50 percent of the market value of the building before the damage occurred.
Substantial damage is determined regardless of the actual repair work performed. Substantial improvement or damage does not, however, include any project for improvement of a building to correct existing violations of state or local health, sanitary, or safety code specifications identified by local code enforcement officials as the minimum specifications necessary to ensure safe living conditions. Also excluded from the substantial improvement requirement are alterations to historic buildings as defined by the NFIP.
A: The NFIP considers the cost of improvement to a structure to be the fair market value of all materials and labor involved with the project, and the cost to repair a damaged structure to be the cost required to restore the structure to its pre-damage condition. Costs to improve or repair a structure may be obtained from sources such as a contractor’s itemized repair estimate, the NFIP Proof-of-Loss Statement, or qualified repair estimates from the community’s Building Department.
When calculating the cost to repair a damaged structure, it is important to include all costs required to restore it to its pre-damaged condition, even if the property owner does not intend to make all repairs at that time. Even if materials or labor are donated or discounted, or if the property owner intends to do some of the work himself, the fair market value of the materials or labor should be used to determine the cost of improvement or repair. Items that are excluded from the cost of improvement or repair calculation include: plans and specifications, survey costs, permit fees, debris removal (including hauling fees), landscaping, sidewalks, and fences.
A: Structures exist that are regularly damaged by flood, but for which the cost to repair those structures after each flood event never reaches 50% of their market value. Such structures often deteriorate and become a hazard over time.
The solution some communities have chosen to address this situation is to revise the definition of “substantial damage” in their floodplain ordinance to cumulatively track a structure’s repair costs over a multi-year period—typically 10 years. If the structure’s cumulative repair costs during that period of time equals or exceeds 50% of its market value, it is required to comply with the elevation requirements of a new building.
A: Employing wise floodplain management can protect future development against the devastating financial loss resulting from flood disasters. Careful local management of development in the Special Flood Hazard Area results in construction practices that can reduce flood losses and the high costs associated with flood disasters to all levels of government.
A: Before a community is eligible for disaster assistance, it must be declared a federal disaster area by the President. Federal declarations are issued in fewer than 50% of all flood events. If a community is declared a disaster area, most assistance is provided in the form of a loan that must be repaid with interest. Plus, you may be required to purchase a flood insurance policy as a condition of receiving federal disaster assistance. Because flood insurance is not available in a non-participating community, properties located in the Special Flood Hazard Area are not eligible for many disaster assistance programs. Property owners in your community may want to consider the benefits offered by flood insurance. Flood insurance claims are paid even if a disaster is not declared by the President. The policies are continuous and cannot be cancelled for repeat losses.
A: No, most homeowners’ policies do not cover damages caused by flooding. However, homeowners can purchase up to $250,000 of coverage for their structure and $100,000 for their personal contents through the NFIP. Businesses can purchase up to $500,000 for their building and $500,000 in contents. Content coverage is also available to those living in condominiums and apartments.
A: Only owners of properties located in the Special Flood Hazard Area who have a mortgage from a federally backed lending institution or federal loan program (e.g., Veterans Assistance, Small Business Administration, Federal Housing Authority, etc.) will be required to purchase a flood insurance policy as a condition of the loan. Individuals who are recipients of a federal grant or disaster assistance are also required to buy flood insurance for the amount of the assistance. However, there is NO general requirement that all owners of property located in an NFIP participating community must purchase flood insurance.
Q: Why is there a requirement to purchase flood insurance in communities that have not suffered flooding in many years, or ever? (FEMA)
A: A major purpose of the NFIP is to alert communities to the danger of flooding and to assist them in reducing potential property losses from flooding. Historical flood data are only one element used in determining a community’s flood risk. More accurate determinations can be made by evaluating the community’s rainfall and river-flow data, topography, wind velocity, tidal surge, flood-control measures, development (existing and planned), community maps, and other data. Over time, additional development or changes in these factors can alter the flood risk, and flood maps may be revised.
Q: Why is my lender requiring me to purchase flood insurance when my structure is not located in the Special Flood Hazard Area? (IDNR)
A: The Flood Disaster Protection Act allows a lender to require the purchase of flood insurance when the lender perceives that the property is at risk of flooding. Even though your structure may be located outside of the Special Flood Hazard Area, your lender can still require you to carry flood insurance. Being located outside of the Special Flood Hazard Area will qualify you for the cheaper premiums associated with a low-to-moderate risk flood zone.
A: About 20% of all flood insurance claims are paid out for losses located in low to moderate risk flood hazard areas.
A: NFIP coverage is available to all owners of eligible property (a building and/or its contents) located in a community participating in the NFIP. Owners and renters may insure their property against flood loss. Owners of buildings in the course of construction, condominium associations, and owners of residential condominium units in participating communities all may purchase flood insurance.
Condominium associations may purchase insurance coverage on a residential building, including all units, and its commonly owned contents under the Residential Condominium Building Association Policy (RCBAP). The unit owner may separately insure personal contents as well as obtain additional building coverage under the Dwelling Form as long as the unit owner’s share of the RCBAP and his/her added coverage do not exceed the statutory limits for a single-family dwelling. The owner of any condominium unit in a non-residential condominium building may purchase only contents coverage for that unit.
A: Yes, federally-backed flood insurance is made available to all property owners living in a community that participates in the NFIP.
After a community joins the NFIP, a policy may be purchased from any licensed property insurance agent or broker who is in good standing in the state in which the agent is licensed or through any agent representing a Write Your Own (WYO) Company, including an employee of the company authorized to issue the coverage. The agent will complete the flood insurance application, obtain the proper supporting documentation required, and determine the rates for establishing the flood insurance premium.
The steps to purchase flood insurance are as follows:
1. Identify the flood zone in which the structure is located.
2. Complete the flood insurance application.
3. If required, obtain supporting documentation (i.e., elevation certificate, photos, zone determination).
4. Submit the completed application, supporting documentation, and full premium to the insurer.
A: There are over 30 private insurance companies in Iowa that have an agreement with FEMA to sell and service flood insurance. (Visit https://www.floodsmart.gov/floodsmart/ to find a list of agents in your area)
A: Generally speaking, any physical damage to your structure and its contents directly caused by a flood. To see a comprehensive list of items covered by flood insurance read the fact sheet found at the following web address (current as of June 2016): https://www.fema.gov/media-library/assets/documents/34505.
A: The minimum amount of coverage required under the law is the lesser of either the outstanding principal balance on the loan, or the maximum amount available from the NFIP. The total amount of coverage available through a policy underwritten by the National Flood Insurance Program is $250,000 for residential structures and $500,000 for non-residential structures.
A: Flood insurance coverage is available for a 1-year term.
A: Yes. There is a 30-day waiting period before flood coverage goes into effect. This is to prevent people from waiting to buy flood insurance until just before the river rises and flood damages are certain. The effective date of a new policy will be 12:01 a.m., local time, on the 30th calendar day after the application date and the presentment of premium. However, there are exceptions in which the 30-day waiting period does not apply:
- In connection with making, increasing, extending, or renewing a loan, whether conventional or otherwise, flood insurance that is initially purchased in connection with the making, increasing, extending, or renewal of a loan shall be effective at the time of loan closing, provided that the policy is applied for and the presentment of premium is made at the time of or prior to the loan closing.
- In connection with lender requirement, the 30-day waiting period does not apply when flood insurance is required as a result of a lender determining that a loan on a building in a Special Flood Hazard Area that does not have flood insurance coverage should be protected by flood insurance. The coverage is effective upon the completion of an application and the presentment of payment of premium.
- When the initial purchase of flood insurance is in connection with the revision or updating of a Flood Hazard Boundary Map (FHBM) or Flood Insurance Rate Map (FIRM): During the 13-month period beginning on the effective date of the map revision, the effective date of a new policy shall be 12:01 a.m., local time, following the day after the application date and the presentment of premium. This rule applies only where the FHBM or FIRM is revised to show the building to be in a Special Flood Hazard Area when it had not been in a Special Flood Hazard Area.
A: Premiums are based on a number of factors such as:
- Flood Zone location
- Elevation of the lowest floor in relation to the BFE
- Amount of Coverage & Deductible
- Age of construction
- Building occupancy
- Total number of floors
- Location of structure’s contents
A: Yes, but it is often 2-3 times more expensive than that available from the NFIP.
A: The Write Your Own (WYO) Program, which began in 1983, is a cooperative undertaking of the insurance industry and FEMA. The WYO Program allows participating property and casualty insurance companies to write and service federal flood insurance policies in their own names. Companies underwrite policies and process claims while the federal government retains responsibility for underwriting losses. All WYO companies provide identical coverage, and rates are subject to NFIP rules and regulations.
A: Insurance may be written on any building eligible for coverage with two or more outside rigid walls and a fully secured roof that is affixed to a permanent site. Buildings must resist flotation, collapse, and lateral movement. The structure must be located in a community that participates in the NFIP.
Manufactured (i.e., mobile, travel trailers without wheels) homes that are affixed and anchored to a permanent foundation are eligible for coverage. Contents coverage for personal belongings located within an eligible building can also be purchased.
A: Buildings entirely over water or principally below ground, gas and liquid storage tanks, animals, birds, fish, aircraft, wharves, piers, bulkheads, growing crops, shrubbery, land, livestock, roads, machinery or equipment in the open, and most motor vehicles are not insurable through the NFIP.
A: Yes. The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides. While flood insurance does not cover basement improvements, such as finished walls, floors or ceilings, or personal belongings that may be kept in a basement, such as furniture and other contents, it does cover structural elements and essential equipment.
A: Increased Cost of Compliance (ICC) coverage under the NFIP provides for the payment of a claim to help pay for the cost to comply with state or community floodplain management laws or ordinances from a flood event in which a building has been declared substantially damaged or repetitively damaged. When an insured building is damaged by a flood and the state or community declares the building to be substantially damaged or repetitively damaged, ICC coverage will help pay for the cost to elevate, floodproof, demolish, or relocate the building up to a maximum benefit of $30,000. This coverage is in addition to the building coverage for the repair of actual physical damages from flood under the NFIP.
Q: Is there any way to obtain a community-wide discount on the cost of flood insurance premiums? (FEMA)
A: All communities in the NFIP adopt and enforce minimum standards for managing construction and development in their Special Flood Hazard Areas. Some communities want to achieve a higher level of safety and protection for their citizens than achieved through implementing minimum standards. When these communities join the NFIP’s Community Rating System (CRS), their policyholders may receive a discount on flood insurance premiums. The discount on their annual flood insurance premiums can range from 5% to as much as 45%, based on the community’s CRS Class.
A: The CRS is an incentive-based program that recognizes communities for implementing proactive floodplain management activities that reduce the risk of flooding. The CRS recognizes communities for their additional efforts to (1) reduce flood damage to insurable property; (2) strengthen and support the insurance aspects of the NFIP; and (3) encourage a comprehensive approach to floodplain management.
Communities that join the CRS receive a rating according to a point system devised to reflect the level of safety provided through the floodplain management activities they implement. CRS communities are assigned a CRS Class, from Class 9 to Class 1,which establishes the level of premium discount policyholders receive. The discount on their annual flood insurance premiums can range from 5% to as much as 45%, based on the community’s CRS Class.
A: Many communities, especially those with severe flood hazards, high rates of growth, or a history of repeated flooding, are aware of the wide range of actions they can take to reduce flood risk in addition to participating in the NFIP. These actions keep their citizens safer, minimize property damage, build resiliency, and foster a better quality of life within the community. Joining the CRS enables communities to earn insurance premium reductions for their residents for activities already being implemented by a community. Community participation in the CRS provides a national benchmark by which a community can measure its performance in floodplain management. It also provides recognition for a job well done and fosters a sense of community pride.
A: Individuals can phone the general NFIP information number at 1-800-427-4661 to find out if their community participates in the CRS and to learn about the amount of the premium discount.