Mississippi Coastal Mapping Project - Real Estate, Insurance, and Lending Industry Professionals

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Preliminary DFIRMs

Insurance, Real Estate, and Lending Industry Professionals

What You and Your Clients Should Know

As a result of the Mississippi Coastal Mapping Project, Preliminary Digital Flood Insurance Rate Maps (DFIRMs) for each county are available on the Mississippi Department of Environmental Quality Web site for you to view. These new maps present up-to-date and more accurate flood hazard and risk information. They are a vital resource for real estate, insurance, and lending industry professionals.

The project is a collaborative effort among the Federal Emergency Management Agency (FEMA), the Mississippi Emergency Management Agency, the Mississippi Department of Environmental Quality, county and local governments, and technical experts from the private sector and research institutions. The project was undertaken as part of the FEMA Flood Map Modernization effort.

The DFIRMs provide more detailed, reliable, and current flood hazard data in digital format. Knowing a more up-to-date picture of a community’s flood risk will allow community officials and citizens to make more informed decisions on where to build and to what height above the ground new building should be constructed.

Compared to the current effective Flood Insurance Rate Maps, which are be up to 25 years old, the flood risk may be higher—or lower—than some homeowners or business owners thought. The Preliminary DFIRMs reflect current flood hazards as a result of an in-depth, large-scale study that re-examined the flood hazards in Mississippi’s coastal counties.

To explain the choices that exist for those that disagree with the outcome of the restudy, we have created a page on the map change options.

How You and Your Clients Should Use the New Flood Maps

Insurance Agents and Companies

When the DFIRMs become effective, flood insurance requirements will change. However, options exist that will allow property owners to save money while still protecting their property. It is important for insurance professionals to know when the changes are taking place and when they become effective. They should be prepared to discuss with their clients what options they have, whether they are being mapped into a higher or lower risk zone, if there is a change in the base flood elevation or no change at all.

As with the NFIP maps for other communities, the Preliminary DFIRMs should not be used for flood insurance rating purposes.

Lenders

In addition to ensuring that borrowers receive notification of current flood zone information, lenders will want to make them aware of any upcoming changes in flood risk status. Loan applicants should also be informed of any flood insurance requirements currently associated with the property. Once the DFIRMs become effective, flood insurance requirements may change. Both the lender and the borrower need to be aware of when the DFIRMs will become final, and what the potential effects will be on the requirements for flood insurance. Knowing this in advance will help make for a smoother closing.

Real Estate Agents and Brokers

Home sellers and their agents should always make it a point to disclose to a prospective buyer if the property is now, or will be, mapped in a high-risk flood zone (known as a Special Flood Hazard Area, or SFHA). To help determine that, they can locate their property on the Preliminary DFIRMs, which are available for review on the Mississippi Department of Environmental Quality Web site.

Home buyers and their agents also need to be made aware of any upcoming changes in flood risk status and the flood insurance requirements associated with a property. When the DFIRMs become effective, flood insurance requirements will change. However, many property owners can save if they purchase their insurance prior to the DFIRM effective date. Additionally, current owners can transfer the policy to new owners at the time of purchase. This process is known as “grandfathering.”

Flood Insurance Requirements and Options

When the DFIRMs become effective, flood insurance requirements will change. However, options exist that will allow property owners to save money while still protecting their property. The following chart provides examples how. By sharing these options with their clients, insurance, real estate, and lending professionals can help them be better prepared and make more informed decisions.

If Maps Show…	These Requirements, Options And Savings Apply
Change from low or moderate flood risk to high risk zone (e.g., an "A" zone) to a coastal velocity zone (e.g., a "VE" zone)	Flood insurance is mandatory. Flood insurance will be federally required for most mortgage holders. Insurance costs may rise to reflect the true (high) risk. “Grandfathering” can offer savings. The National Flood Insurance Program (NFIP) has “grandfathering” rules to recognize policyholders who have built in compliance with the flood map in effect at the time of construction or who maintain continuous coverage. Sometimes, though, using the new flood maps can actually result in a lower premium than by “grandfathering.”
Change from high flood risk to low or moderate risk	*Flood insurance is optional but recommended. The risk has only been reduced, not removed.* Flood insurance can still be obtained at lower rates. About 25 percent of all flood insurance claims come from low- to moderate-risk areas. Conversion offers savings. An existing policy can be easily converted to a lower-cost Preferred Risk Policy, if the building qualifies.
Increase in the Base Flood Elevation (BFE)	An increase in BFE can result in higher premiums; however, “grandfathering” can offer savings. The National Flood Insurance Program has “grandfathering” rules to recognize policyholders who have built in compliance with the flood map in effect at the time of construction. This could result in significant savings.
No change in risk level	No change in insurance rates. However, this is a good time to review their coverages and ensure that their building and contents are adequately covered.

Resources

The Resources page contains fact sheets, brochures, and other helpful documents. We will continually update inventory of resources, so check back often for the latest materials. Three specific fact sheets that you may find useful are:

Flood Maps Are Changing: What Real Estate Agents Should Know
PDF [61.5K] Text [8K]
Flood Maps Are Changing: What Insurance Agents Should Know
PDF [60.1K] Text [7K]
Flood Maps Are Changing: What Lenders Should Know
PDF [62.3K] Text [7K]

More Information

If you need more information or have a question, several options are available:

You may find your answer in the Frequently Asked Questions.
Insurance agents can visit www.agents.FloodSmart.gov for information and tools to educate themselves and their clients about flood insurance.
The Links section contains other sources related to Flood Map Modernization, the NFIP, and Mississippi study production information.
You can contact the call center that has been set up specifically for the Mississippi Coastal Mapping Project in the Biloxi Transitional Recovery Office. You can reach the call center, toll free, from 9:00 a.m. to 5:00 p.m., Monday through Friday, at 1-866-816-2804.
You can contact the FEMA Map Assistance Center for more technical questions and information about the National Flood Insurance Program.
If you do not find the information you need, you can also contact a Map Specialist on the Ask the Experts page.