FEMA, Levees…and Flood Insurance

In the post Hurricane Katrina world FEMA, who took such a pounding for it’s response to the New Orleans disaster, is being extra cautious when the subject of levees comes up. That subject is certainly up when it comes to Foster City. On the 18th of this month FEMA released the preliminary drafts of their Flood Insurance Rate Maps and Foster City is being reclassified into a special flood hazard zone…and thus flood insurance will be required for all homes here.

Interestingly, the levee that’s the most problematic from the standpoint of FEMA is in San Mateo and thus there’s some amount of negotiating going on to get the levees repaired to a degree that will satisfy FEMA and prevent a final ratification of the Flood Map scheduled for 2010. Currently, San Mateo’s estimate for completion of construction of their problem levee will be after the FEMA deadline. I’ve heard from several insurance agents that buying flood insurance before the final date will save significant dollars per year on that type of policy. It’s a good idea to check with your agent and ask questions about adding flood insurance…don’t wait too long to do it. If you live in a condo or townhouse it’s doubly important because you don’t want your association dues to go up more that is absolutely necessary. Here’s a link to a press release from the City of Foster City about this topic:




  1. SteveTinFC says:

    FYI, I called my homeowners insurance company today. Their Flood Department told my agent that they could not give him a quote for Flood Insurance because Foster City is not on the flood map (we are a Zone X classification currently “not a flood risk”), so it would not be available until the flood map actually shows us.

    Does that sound right to you? Can you get flood insurance before you even are on the map?

  2. I called a couple of agents this afternoon to double check that and I was told that both could, in fact, quote regardless of the map. From what I heard, Allstate isn’t writing new homeowner policies right now and thus isn’t too crazy about Flood as part of their offering. Jennifer Selvitella’s going to comment later and I’m going bto try to get a Farmers agent to contribute as well.

  3. Jim, do you expect this to have an effect on home prices here in FC?

  4. From the standpoint of singe family homes, I really don’t. There’s a number of neighborhoods in San Mateo, San Carlos & Redwood City that require flood insurance and the impact on values have been minimal at best. I am, however, concerned about the condo & townhouse projects in Foster City. Marina Point and the Islands are both close to $500.00 a month right now on their dues. I would think that $600.00 a month or so could have an impact on values there. That’s why those associations need to figure this thing before FEMA finalizes it and they have to pay top dollar for a policy.

  5. SteveTinFC says:

    Just an update.

    1) Yes, Allstate confirmed that’s the issue, they aren’t writing new policies, including flood insurance.

    2) I spoke with our PW Director and his staff. The tell me that flood insurance is a federally administered program and the insurance companies are simply agents for the federal program. They say that if my homeowners’ insurance agent will not write a policy I can go to another agent and just get the flood insurance from that agent (will have to check that). The http://www.floodsmart.gov website may be of assistance to anyone considering flood insurance.

    3) I don’t have to go with my homeowners’ insurance agent to buy it. Since it’s a federally administered program, I can buy it from any agent that is an authorized NFIP agent. The floodsmart.gov website has the information.

    4) If you buy the premium policies (low risk) today, the cost for a $250k coverage of building / contents (the max) is $318 per year. Rates for Zone A (high-risk) will go up to $2,462 per year. For at least the first year after FEMA’s new FIRM maps are put into place, they will continue to honor the existing premium rate. After that, if FEMA does not change the FIRM map, it will go up to the Zone A rate. FEMA said the concept of “grandfathering rates in perpetuity” is an urban myth.

    5) FEMA indicated that they can change the FIRM maps within a 90-180 day window. So, once San Mateo gets the improvements done to remediate the Zone A rating, we could be back to Zone X (low-risk) and the rates go back down.

    I know I would not have to do anything for at least another year+, but I do want to get my ducks in line if I have to buy the insurance. Hope that’s helpful info.


  6. Joe Castagno/Farmers Insurance says:

    Hi Jim,

    After reviewing all of the comments associated with this issue it seems that Steve has covered all the main points. I will say however, That my experience over the past nineteen years as an agent regarding the “Grandfathering” of rates by FEMA even after any remapping has held true. If a current property owner purchased flood insurance on a home while still in zone X (Low Risk)that property owner would continue to be offered that same low risk policy at renewal. This would continue to hold true even if that property was remapped by FEMA in to a zone A or V (High Risk). A change of property ownership however, would trigger an increase. As the new property owner would have to purchase a new flood policy in his or her name and would be subjected to the current mapping criteria for pricing. The key to all of this is, if you are contacted by FEMA regarding the remapping of your property make sure you purchase your flood policy before that happens! Rememeber FEMA has a 30 day waiting period for the purchase of Flood insurance unless it is for a close of escrow.

  7. Jennifer Minkey-Selvitella says:

    Sorry that it has taken me so long to weigh in Jim. Here is what I can offer on this obviously “hot” topic. I disagree with some of the previous comments. First, I have to point out that there is no way to answer this question with a single response as there is no “blanket” or “one size fits all” answer. There are many factors that come into play. You can indeed purchase a flood policy now as a homeowner in Flood Zone X. It would be $317.00 (for $250K of coverage for dwelling and $100K of property with a $500 deductible)as it is a “preferred zone.” In the event the zone changes, after your policy has been written, you would be grandfathered under zone X. This does not however, mean you would keep the rate of $317.00. The premium would increase on the next renewal date at “standard” X zone rates as opposed to “preferred” X zone rates. The benefit to you is, you would not be paying the “standard” rate for the new flood zone, which would be higher. Another inaccuracy has to do with the change of ownership. The seller can agree to pass the policy to the buyer with a signature on the flood application. The new owner could then “inherit” so to speak, the zone x rating. The seller would receive any unused premium left on the policy back, and then the buyer would of course have to take over premium payments. This of course works better if both seller and buyer are with the same insurance company. Keep in mind, when you do decide to purchase flood insurance, whether by choice or because your lender now requires it, there are still different scenarios for every home. These can include such things as when your home was built, pre-firm (before the community zone map was issued), or post-firm, after it became a zone. There are also issues with elevation certificates. If you are required to provide an elevation certificate (usually applies with post-firm), you would have to pay a certified land surveyor to complete one for you. Here is a link to FEMA which addresses some of the topics I discussed above: http://www.fema.gov/pdf/nfip/manual200705/05rate.pdf
    Keep in mind, it is still better to purchase earlier, rather than later.

  8. I think the correct person to talk is the attorney, not insurance agent. Examiner mentioned lawsuit of Foster City against San Mateo.

  9. In regard to the last comment about an attorney, I understand where you are coming from, but here are a few things an attorney can’t do. They can’t set you up with a Flood policy when your lender is breathing down your throat. Your lender is not going to care about any pending litigation. All they will care about is the insurable interest they have in your home. Even if there is pending litigation, in the interim you may have to purchase flood insurance, and if you don’t your lender can force it on you. This is not a position you want to find yourself in. An attorney also can’t change the flood maps as set by FEMA. Hopefully, San Mateo will get in gear and complete the necessary steps prior to the 2010 FEMA deadline for Foster City.

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