What risk zone is the building in (on the Flood Insurance Rate Map or FIRM)?

Three types of risk zones on the FIRM are used in determining the insurance premium:

• Areas of minimal flood risk. These are the X zones on recent maps and C zones on older maps. The X zones include areas with 0.2% annual risk, formerly known and mapped as B zones. The B zones have been rolled into the X-zone category. Properties in B, C or X zones may qualify for a Preferred Risk flood insurance policy.

• Areas at risk from water with little or no waves (not exceeding 3-foot crest height). These are the A zones on both new and old maps.

• Areas at risk from water that has waves 3 feet or higher. The wave action imposes a different force on a structure than water without wave action. These are the V zones, typically found along coastlines and lakeshores.

How many times has the building flooded?

Strange as it may seem, the flood history of a structure seldom has any bearing on the flood insurance premiums in special flood hazard areas (A and V zones). At worst, a history of flooding will disqualify a property in a minimal risk zone (B, C or X) from obtaining a preferred-risk policy, but it will not otherwise affect the premium for a standard flood insurance policy in those zones.

Congress altered the program in 2012-2013, creating two classes of properties for which the flood claims history of the property will have an impact on premiums. Those properties are ones that were built before the community got its initial Flood Insurance Rate Map and the property is either

• the property has been classified as a Severe Repetitive Loss (SRL) property, or
• the building has been substantially damaged or substantially improved

How old is the building, and how high?

The absolute age of the building is not significant. What matters is whether the building is older than the flood map. Buildings that were built before the community got its first FIRM can be insured at a federally subsidized PreFIRM rate. Owners of PreFIRM buildings can elect to be insured at the PostFIRM rate if they obtain an elevation certificate showing the structure is at, above or less than 6 inches below the 100-year flood level shown on the map. You do not lose a PreFIRM rate if the elevation certificate shows the building is well below BFE.

Buildings that were built after the community got its first FIRM must be insured at the PostFIRM rate, with some exceptions given for changes in the maps. For PostFIRM rating, the elevation in relation to BFE is important, as is the risk zone (A or V).

Is the building used for residential or non-residential purposes?  Is it a business?

Occupancy type has always been a factor in rating.  However, as a result of NFIP Reform legislation in 2012 and 2013 the occupancy-type of the building is having a greater impact on premiums for buildings constructed and rated as being Pre-FIRM.  For these older buildings, rates are escalating rapidly for all uses other than the owner's primary residence.