Flood Insurance and CRA’s Businesses
As you are aware, flood insurance is available to businesses within CRAs throughout the State. Premium costs vary depending on how much insurance is purchased and the property’s flood risk area (i.e., Flood Zone). For example, if a property is located in a moderate to low risk area (“X” zones) and you purchase $250,000 building and $100,000 contents coverage, you would qualify for a “preferred risk” policy with an annual premium of about $355.
On the other hand, if located in a high risk area (“A” zones) and purchase the same amount of coverage, you can expect to pay $2,633. The premiums go up even higher for coastal areas (“V” Zones) where you expect to pay $5,700 each year for the same amount of coverage! Unfortunately, many of the Flood Insurance Rate Maps (FIRM) or “flood maps” are based on antiquated large scale countywide data and do not incorporate individual or site specific topographic feature.
Even when data sets for these flood maps, in high growth area, are less than ten years old, the zone designations can be erroneous due to new construction, changes in land use, and man made features or alterations since the initial study, mapping period, and adoption date.
Additionally, along coastal communities “A” Zones are located immediately landward from “V” zones. Each of these Flood Zones have special design and construction requirements for structures located within these areas. In an “A” zone, the top of lowest habitable floor must be elevated to or above the required Base Flood Elevation (“BFE”), but in “V” Zone, the bottom of lowest horizontal structure member supporting the lowest horizontal structural member supporting the lowest habitable floor must be elevated to or above the BFE.
Typically, the difference in elevation between these reference points could range from 16 to 24 inches or greater. Issues regarding conformity with the Florida Building Code (and proposed International Building Code) with respect to these two different zones may have serious cost implications for any future sale or renovation/remodeling of any commercial property in an erroneous flood zone.
Considering the cost implications of an erroneous flood zone designation CRA’s businesses are well advised to solicit a cost-effective community based FIRM update through qualified consultants.
For further information contact: Mohsen Salehi, AICP, 239-334-3366