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NFIP Flood Zones and Requested Map Exceptions

Since 2006 there has been a growth industry in the number of private, fee-for-hire companies that offer large property owners the opportunity to have their buildings excepted from their current flood zone determinations
February 7, 2012

Since 2006 there has been a growth industry in the number of private, fee-for-hire companies that offer large property owners the opportunity to have their buildings excepted from their current flood zone determinations. For a fee (sometimes based on the percentage of flood insurance premium reduction the company achieves for the client) large-scale property developers, commercial building complex owners and large condos can hire these firms to develop the documentation and file a petition to NFIP Direct, on behalf of the property owner, to have the flood zone changed for their properties. An increasing number were being granted, while all other NFIP policyholders in these zones were taking a rate increase from the new NFIP flood maps.

Background: This issue was raised individually with FEMA/NFIP by PIA and other agent groups. Then, the producer trades placed this on the agenda of the Flood Insurance Producers National Committee (FIPNC) beginning last year. That first discussion was followed by a very well documented presentation by an Alabama agency demonstrating the specifics of this increasing problem, it’s unfairness to all others in the zone and how contrary the process seemed to what WYOs and producers were required to do by NFIP.  All three producer trades also provided additional information and materials expressing the same concerns, documenting similar problems, and giving examples that were from across the country, making clear that this was not just an Eastern-Gulf Coast issue. This was at the same time that more confusion was arising between the manner in which lenders were approaching their NFIP compliance and flood zone determinations. As the producer associations through FIPNC continued to press both issues (lenders & private companies) at this past October’s FIPNC meeting, FEMA/NFIP advised that the information provided gave a solid basis for it to review the issue.

FEMA/NFIP determined it needed to first clarify the NFIP flood zone determination procedures (again) for both lenders and WYOs which would serve as a reminded to both parties of what NFIP expects and its process. The 11-10-11 iService bulletin w-11117 made clear to lenders that their questions concerning anything NFIP were to be directed to and determined by FEMA/NFIP and appointed a specific Lender contact person, Jeff Woodward.  That was followed on 11-30-11 by iService bulletin w-11123 advising how WYOs are to “make” and display NFIP flood zones on their issued documentations. Both laid the FEMA/NFIP controlled groundwork to move lenders to better understanding that FEMA/NFIP was the authoritative source for their inquires, and get lenders on the same page that is required of WYOs, thus lessening differences and confusion.

In the memo it issued in February 3, 2012, iService Bulletin w-12005, FEMA/NFIP makes clear to for-hire private NFIP zone determination companies that FEMA/NFIP has identified some of these providers that appear to regularly misapply available information, and that their resulting exceptions are wrong. Further, it makes clear that these vendors and their clients are to use the most current FEMA/NFIP Flood Zone map information issued by FEMA/NFIP and direct all their questions and inquiries to Joseph Cecil at FEMA/NFIP. It notes that there is too much variance among these vendors’ results both compared to one another and compared to the specific process and requirements issued by FEMA/NFIP.

All three of these bulletins make clear it is FEMA/NFIP that controls this process; is the authoritative source; and that it is their current information and maps that must be used.

We welcome your comments, suggestions and/or questions to Richie Clements, PIA National Secretary Assistant Treasurer and PIA Member Representative to NFIP/FIPNC, and staff

See NFIP Bulletin W-12005: NFIP Bulletin W-12005 (FEMA/NFIP 2/3/12)

See NFIP Bulletin W-11117: NFIP Bulletin W-11117 (FEMA/NFIP 11/10/11)

See NFIP Bulletin W-11123: NFIP Bulletin W-11123 (FEMA/NFIP 11/30/11)

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