Flood insurance is mandatory if you live in a high-risk area and have a mortgage from a federally regulated or insured lender.

Coming Changes

Changing Maps, Changing Risks

As the new flood maps are released, they will reflect current flood risks, replacing maps that are nearly 30-years old. As a result, lenders and real estate professionals will have reliable, internet-accessible information about flood risk on a property-by-property basis. As the preliminary maps are now released and the date approaches for the maps to become effective, many property owners will learn that their flood risk is higher, or lower, than they thought. The changes may affect closings and existing loans for both residents and business owners throughout the county.

Avoiding Delays

Lenders Can Avoid Closing Delays

If a building is shown to be within a high-risk zone on the flood map currently in effect, flood insurance must be in place if there is a mortgage through a federally regulated lender. This requirement does not change as a result of new preliminary flood maps being released. Lenders (or their flood zone determination company, if they outsource that service) cannot use preliminary flood maps to determine federal flood insurance requirements. However, some lenders may decide to require flood insurance as part of their own internal underwriting of the loan.

As the date that the maps become effective gets closer, loan originators and mortgage brokers will want to refer to the preliminary maps to determine whether a property might be mapped into a high-risk area when the maps do become effective. By informing the borrower of this potential change before a loan is finalized, they will help minimize any delay in loan closing due to changes in flood zones and flood insurance requirements.

Once the new flood maps become effective, federally regulated lenders will notify property owners that have been mapped into a high-risk area that they are now required to carry flood insurance. Property owners that have been mapped out of the high-risk areas will be informed that they no longer are required to carry flood insurance. However, removing the requirement does not guarantee that it will not flood; property owners should be encouraged to stay protected with a lower cost Preferred Risk Policy (PRP), with premiums starting as low as $119 per year.

Avoiding Surprises

Real Estate Professionals Can Avoid Unpleasant Surprises

Real estate professionals can also use the preliminary flood maps to determine how proposed zone changes are likely to affect any properties that are for sale. You will want to disclose any changes in flood risk levels to your clients and tell them about flood insurance requirements and options. Not to do so puts you at risk and could delay and perhaps jeopardize the purchase/sale of a property. The good news: the new maps are much easier to use than the old maps. Real estate agents and brokers should also become familiar with the flood insurance grandfather options that can help keep their client’s insurance costs down, including the possible transferring of a seller’s existing flood insurance policy to the new owner. To learn more, go to the Resources page.

Making Appeals

Every home or commercial building in Shawnee County has some risk of flooding—but the risk varies, sometimes within the same neighborhood, or even the same property. If the property owner disagrees with their new zone designation or base flood elevation, they will have the opportunity to file an appeal. They will need to prove that the existing flood data is incorrect by providing some technical information about the property, such as a survey, elevation certification, hydrology study, etc. More information can be found on the Public Comment Period page.