Q: My mortgage company informed me that I am in a designated Special Flood Hazard Area (SFHA). What is a SFHA?
A: The SFHA is what is commonly referred to as the "100-year" floodplain. This is somewhat of a misnomer because it often leads people to believe that this is a flood that occurs only once in 100 years when in fact there might be two "100-year" floods within a month. The "100-year flood" is the name given to a flood that has a 1% chance of occurring in any given year. In fact, over a 30-year mortgage, there is a 26% chance that a flood will occur to a home and only a 4% chance of a fire.
Q: Why is my lender requiring the purchase of flood insurance?
A:For nearly every mortgage transaction in the United States that involves a structure, the lender reviews current National Flood Insurance Program (NFIP) maps for the community in which the property is located. The NFIP map review is made to determine the location of the property in relation to the SFHA. If the lender determines that the structure is indeed located within the SFHA and the community is participating in the NFIP, the borrower is notified that flood insurance will be required as a condition of receiving a loan. These lender requirements are set forth in the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994. Stipulations of these legislative acts require the purchase of flood insurance by property owners who are being assisted by Federal programs or by federally regulated institutions in the acquisition or improvement of land, or facilities, or structures located or to be located within an SFHA.
Q: How can a property owner determine if the property is in a Special Flood Hazard Area (SFHA)?
A: FEMA publishes Flood Insurance Rate Maps, which show the flood hazard areas in communities. The Flood Insurance Rate Map for the County is on file with the Department of Environmental Resources (DER) and many insurance companies. In addition to the Flood Insurance Rate Map, DER has done a number of watershed studies covering most of Prince George's County. The Flood Insurance Rate Map and local floodplain maps can be viewed by the public at the DER offices in Largo. In addition, local residents and business owners can call the Department of Public Works and Transportation at (301) 883-5777 to request floodplain information about their particular property.
Q: What if I disagree with my lender's determination that I am in the flood zone?
A: Property owners may not contest the requirement if the lending institution has established the requirement as part of its own standard lending practices. However, if a lending institution is requiring the insurance to meet mandatory flood insurance purchase requirements of the NFIP, the property owner and lender may jointly request that FEMA review the lending institution's determination. The FEMA review merely looks to see if the determination is accurate based upon a review of the NFIP maps and the location of the property in relation to the SFHA. If a property owner is not satisfied with the results of this review, they may apply for a Letter of Map Amendment (LOMA), which is a more detailed look at the elevation of the structure on the property and the elevation of the floodplain as shown on the NFIP map. Please call Yanping Zhang at (301) 883-5787 for additional information on the LOMA process.
Q: Who can purchase a flood insurance policy?
A: NFIP coverage is available to all owners of insurable property (a building and/or its contents) in a community participating in the NFIP. Owners and renters may insure their personal property against flood loss with "contents coverage"
For the answers to additional questions on flood insurance purchase requirements and flood zone determinations, visit the FEMA website at http://www.fema.gov/business/nfip/