When High-Risk Becomes Higher, Offer Cost-Savings

What’s changing

A client’s flood risk is changing from a high-risk area (Zone A) to higher-risk area (Zone V) or the Base Flood Elevation (BFE) is increasing.

An image depicting a transition from high risk to higher risk

What this means for existing clients

Continuous grandfathering: For clients in high-risk areas whose flood risk is increasing, the NFIP offers the cost-saving option known as grandfathering. Grandfathering allows clients to “lock in” their current flood risk rating or BFE.

For clients to qualify for grandfathered rates, they must purchase or renew their policy before the new flood maps become effective. Clients also must maintain coverage continuously to keep their grandfathered rate. If the building is sold, the policy can be assigned to the new owners, allowing them to keep the continuous grandfather rating option.

Built-in-compliance grandfathering: Grandfathering is also available after the new flood map’s effective date, but only for properties that were built in compliance with the floodplain regulations at the time of construction. This is known as “built in compliance” grandfathering and requires additional documentation.