Michigan Surveying, Inc.

Michigan Surveying, Inc.

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Mandatory Flood Insurance & how to eliminate or reduce your premium

Millions of dollars are spent annually on properties that never have flooded, never will flood, and have never produced a claim against the premiums paid. This is because the property has been placed in a Special Flood Hazard Area (SFHA) by the Federal Emergency Management Authority (FEMA); the owners are then required to carry flood insurance by their mortgage companies. These premiums subsidize properties that are truly in danger of flooding but do not pay premiums accordingly since your premiums contribute to the flood insurance system! Did you know that 60% of flood zones reviewed are found to be wrong? Take a few minutes to explore this site in detail and find out what you can do about this enormous waste of money.

  • 1. Does your mortgage company require you to carry costly flood insurance? 2. Has your home been free of flood damage since you have owned it? 3. Do you want to eliminate the flood insurance on your property? 4. Are you paying for flood insurance you do not want?

    • If you have answered yes to any of these - Read On.

    You are required to carry flood insurance because your mortgage company has determined that at least a portion of your property is located in a SFHA with a 1% annual chance of flooding. The federal government requires flood insurance on properties located in a SFHA unless the flood zone is changed or clarified by FEMA.

    You have a right to dispute the flood zone determination and have it changed if it is wrong. However, the burden of proof that SFHA designation is wrong lies with the home owner or renter.

    Be proactive and get informed. It is your money you are wasting and it is your money you will save each year. On top of wasting your money on flood insurance, properties which have a flood zone designation attached to them are harder to sell and therefor do not bring the full potential value when they are sold. This is due to the flood zone designation and the additional cost associated with owning the property.

    The following steps are required in order to successfully remove property or structures from SFHA designation:

  • 1. A Field Survey based on data contained on the Flood Insurance Rate Map (FIRM), which covers the area where your property is located. 2. Based on the field data a Professional Surveyor prepares an Elevation Certificate on an official form issued by U.S. Department of Homeland Security and obtains FEMA approval. 3. The surveyor petitions on your behalf to FEMA to remove a structure from SFHA with a Letter Of Map Amendment (LOMA).

    • Once the LOMA is issued and the flood zone is changed on your property, flood insurance is no longer required by FEMA. You then have two choices. First, you can cancel your current national flood insurance policy (NFIP) and obtain a full refund for the current year premium that you have already paid as long as the payment is current and there have been no claims. Or you may choose to continue to carry flood insurance through a preferred risk policy and since the insurance is not required you can carry any amount of coverage you want. You do not need to carry the full amount of your mortgage if you choose. Premiums are greatly reduced when you choose this option.