Grandfathering

How to save money with the Grandfather Rule.

If your property changes from low-risk to high-risk, you will likely be required to protect your building and its contents with flood insurance—even if you don’t have a mortgage.

Flood insurance rates for high-risk areas are higher, but there are ways to save money with the NFIP Grandfather Rules.

You can take advantage of grandfathering by obtaining a policy before the new maps take effect. You’ll likely qualify for the NFIP Preferred Risk Policy (PRP), which covers buildings and their contents. On renewal, you will qualify for the standard rates associated with moderate-to-low risk zones, rather than high-risk zones, and this could add up to significant savings. To lock in using the lower-risk zone (or better Base Flood Elevation) for future rating, you must purchase flood insurance before the new maps become effective-otherwise, the property will be rated using the high-risk flood zone on the new map.

For older structures built before the community’s first flood map was issued, this is the only grandfathering option. Structures built after the community’s first flood map was issued have two opportunities to lock in the flood zone (or Base Flood Elevation, BFE):

  1. You can purchase a policy before the new maps take effect, or
  2. You can use the grandfather rule if you have proof that your home was built in compliance with the flood map that was in effect at the time of construction-your insurance agent can help produce the necessary documentation.

Note that in some cases, the new flood map may actually result in a lower premium than what grandfathering applies.