Flood Insurance in the San Juans

Posted March 21, 2017 at 5:47 am by

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By Mer­ri Ann Simonson…

Merri Ann Simonson - Contributed photo

Most of the water­front home own­ers in the Coun­ty went through the process of deter­min­ing if flood insur­ance is a neces­si­ty for their prop­er­ty when they pur­chased or refi­nanced. As you may be aware, the major­i­ty of our water­front prop­er­ties are des­ig­nat­ed as being in the flood plain as deter­mined by the cur­rent Fed­er­al Emer­gency Man­age­ment Agency (FEMA) maps. What you may not real­ize is that a high per­cent­age of the homes and oth­er struc­tures, when fur­ther analy­sis is done, may not actu­al­ly require flood insur­ance.

When pur­chas­ing a water­front prop­er­ty, whether you are using a lender or not, the first step in deter­min­ing whether you need the insur­ance is to obtain the Flood Deter­mi­na­tion Cer­tifi­cate. The lender will process one as part of the loan pack­age but if you are a cash buy­er, you may uti­lize one of the numer­ous ser­vices on the web for a nom­i­nal fee of $25.00. Oth­er options include view­ing the prop­er­ty with the flood plain map over­lay on the Coun­ty site. If the deter­mi­na­tion indi­cates the prop­er­ty is in a flood plain, you will want to hire a sur­vey­or to con­firm the Base Flood Ele­va­tion (BFE) for your prop­er­ty. The process typ­i­cal­ly takes 10 days after a site assess­ment is com­plete and the appli­ca­tion has been sub­mit­ted to FEMA. The insur­ance under­writ­ers will require a BFE in order to issue cov­er­age and if you are using a lender, they won’t close until you have a pol­i­cy in effect. 

As a result of the pas­sage of the Big­gert-Waters Act in Octo­ber 2013, flood insur­ance rates through the Nation­al Flood Insur­ance Pro­gram have been increas­ing. Fur­ther, FEMA is no longer sub­si­diz­ing the rates due to large los­es through­out the nation due to hur­ri­canes and oth­er sim­i­lar events.  Due to increas­ing pre­mi­ums, it will be more impor­tant than ever to deter­mine whether your prop­er­ty should have flood insurance. 

The Base Flood Ele­va­tion (BFE) from the sur­vey­or is also a key part of deter­min­ing whether insur­ance is nec­es­sary.   Once the BFE is obtained, the sur­vey­or will then sur­vey the prop­er­ty and deter­mine the ele­va­tion of the low­est grade adja­cent to the structure(s). This will con­firm if the struc­tures on the prop­er­ty should be insured or may be eli­gi­ble to be removed from the flood zone. If the struc­tures remain in the flood plain and you are using a lender, you must obtain flood insurance.

If you are a cash buy­er, it is a per­son­al deci­sion. One might want to review the fore­cast­ed Tsuna­mi path for the Coun­ty to deter­mine if your prop­er­ty could be flood­ed and ver­i­fy with your insur­ance agent that your pol­i­cy would cov­er such a dis­as­ter.   Chances are flood insur­ance will not cov­er glob­al warm­ing and sea lev­el rise until, and if, they actu­al­ly occur, and then the gov­ern­ment would need to man­date the coverage.

As in the case of your stan­dard Haz­ard Home­own­ers Insur­ance, only the struc­tures are insured, not the dirt.

FEMA recent­ly con­tract­ed with the Corps of Engi­neers (Corps) to com­plete the map­ping and deter­mine the Base Flood Ele­va­tions (BFE) for our Coun­ty. FEMA then adopt­ed those maps for reg­u­lat­ing the insur­ance. The Base Flood Ele­va­tion for most of the Coun­ty is 12 to 16 feet. Gen­er­al­ly speak­ing if your prop­er­ty has a BFE of 13 feet or greater, you may be eli­gi­ble to obtain a Let­ter of Map Amend­ment (LOMA) which allows you to waive your flood insur­ance. Below 13 feet, the LOMA may be more difficult. 

Bot­tom line, if you have water­front prop­er­ty, it is most like­ly des­ig­nat­ed as being in the flood zone by FEMA unless proven oth­er­wise by a Pro­fes­sion­al Land Sur­vey­or. The recent updates to the maps have fur­ther enhanced the con­sumer protection. 

To view the REVISED flood maps and the BFE in your gen­er­al neigh­bor­hood you can use the link below:


If the struc­tures as sur­veyed are above the flood plain, then the improve­ments and a por­tion of the par­cel may be eli­gi­ble for a Let­ter of Map Amend­ment (LOMA). To obtain a LOMA, you should hire the sur­vey­or again, as they process these on a reg­u­lar basis and are famil­iar with the zil­lion forms required by FEMA. The sur­vey­or will sub­mit the appli­ca­tion for a LOMA to FEMA and the process is 2+/- weeks. The total cost is approx­i­mate­ly $2,200–2,500.

I believe this to be mon­ey well spent as the $2,500 rep­re­sents about 50% of the annu­al flood insur­ance pre­mi­ums on a typ­i­cal San Juan Coun­ty water­front home. The time frames to com­plete a BFE and a LOMA are with­in the stan­dard pur­chase con­tract term of 45 days; how­ev­er it is rec­om­mend­ed that a prospec­tive sell­er process this infor­ma­tion in advance of list­ing the prop­er­ty. If you are work­ing under a tight time frame, anoth­er option for a buy­er is to close on the pur­chase with your loan and flood insur­ance; then, obtain the LOMA after closing.

If you cur­rent­ly own water­front prop­er­ty and are pay­ing for flood insur­ance, it may be ben­e­fi­cial for you to move for­ward with the pos­si­ble LOMA so that you can avoid pay­ing pre­mi­ums. It will also help expe­dite the sale of your prop­er­ty in the future as the LOMA runs with the land and can be used by a buyer.

Once you secure the LOMA, you will need to send that into your lender’s loan ser­vic­ing depart­ment which may take a few more weeks. They will issue you a Waiv­er of Flood Insur­ance Notice which is your invi­ta­tion to can­cel your flood insur­ance. The insur­ance firm should pro­rate back your pre­mi­ums for any unused term.

This arti­cle is for infor­ma­tion­al pur­pos­es only. As each prop­er­ty has unique char­ac­ter­is­tics, prop­er­ty own­ers should check with their licensed flood insur­ance agent to deter­mine their options and the best solu­tion regard­ing their flood insurance.

We have numer­ous sur­vey­ors in the Coun­ty that process the appli­ca­tions for Base Flood Ele­va­tions and Let­ter of Maps Amend­ments, I rec­om­mend the following:

Bob Wil­son –     San Juan Sur­vey­ing          378‑2300 www.sanjuansurveying.com

Andy Hol­man – Hol­man Land Sur­vey­ing   378‑0338 www.holmansurveying.com

Bob Ander­son – Star Sur­vey­ing                  378‑5072 www.starsurveying.com

If you have any ques­tions about our cur­rent real estate mar­ket, please be sure to con­tact me.

Mer­ri Ann Simonson

Man­ag­ing Bro­ker – Sales Manager

Simonson@sanjuanislands.com 360–317-8668 cell

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Categories: Real Estate

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