Is it possible to reduce flood insurance or remove from flood zone if identified in FEMA Special Flood Zone? Answer: Yes. It is possible. Depends on exact elevation of house compared to official base flood evaluation.
Team Howlett was recently helping a wonderful client help sell her log cabin house in Rossville. There was some difficulty since the house was designated in the hundred year flood zone from a nearby creek. The exterior and interior were beautiful with 5 acres of land. Great lighting, exposed glowing wood, and lots of room.
From a quick check with online FEMA flood maps, the property did lie in a flood zone and the edge of the flood zone appeared to butt up against the back of the garage. The seller was paying approx $900 / year in flood insurance for many years. Based upon the map and after talking with a local survey company, we found we had a chance to either reduce the amount of flood insurance or remove from flood zone completely. And thus we would be able to complete the sale for our client.
We worked with Pat Jarboe from T-Bird Design Services to help us manage the entire process.
Step 1: Obtain from Indiana DNR a Floodplain Analysis. This will get the exact official base flood elevation at the residential building.
Step 2: Surveyor needs to conduct an elevation survey at the residential building. They will determine the exact height of the top of bottom floor, top of attached garage floor slab, lowest elevation of machinery, and lowest adjacent finished grade next to building. Then, the surveyor will put information on an Elevation Certificate. This certificate can be used to submit to insurance companies and lenders to help lower the amount of flood insurance is needed based on how much of the structure is above or below the official base flood elevation.
After we got the Elevation Certificate completed, we sent to the buyers. From this certificate, the lender said that separate flood insurance was not required for them to get the loan. Yay! We closed on the transaction 2 weeks later. SOLD!
So, even if you’re not selling, if may be worthwhile to do this process. In our situation since we had T-Bird manage the entire process, the cost to get the certificate was $1500. Since the annual flood insurance was $900 / yr. So, you would recover your cost in less than 2 years. Caveat, there is no guarantee that the elevation survey and certificate will indicate a reduction.
This Elevation Certificate does not actually remove the residential building from the FEMA flood maps.
Optional Step 3: Submit Letter of Map Change to FEMA. Again you can have someone manage this process for you or you can do on your own. You would need to submit the Elevation Certificate showing all parts above the base flood level. Even the finished adjacent grade would need to be above. If there are parts of the grade below, you can use construction grade limestone to bring above the flood level, then re-survey. Beware the time frame for processing these letters can be 3-6 months. If FEMA does accept the Letter of Map Change, then the building can be officially removed from the flood zone.
We were so glad to have helped our out of town seller complete this deal. In the meantime I learned more about how it is possible to reduce flood insurance and / or remove completely. Another wonderful real estate day for Team Howlett. Learn more About Us.