This policy is to iterate FEMA policy on the application of flood insurance deductions for uninsured properties located in a special flood hazard area (SFHA) at the time of a disaster when a LOMA or LOMR is requested and obtained after the declaration date. This policy is applicable to all disasters declared after the date of this policy and to open disasters declared prior to this date, provided a LOMA or LOMR has been requested or obtained within six months of the declaration date and the project application is open. This policy is intended for use by all personnel involved in the administration of the FEMA Public Assistance program. This policy is archived and has been superseded by the policy currently in effect.
DATE: July 19, 1996
Response and Recovery Policy Number: 4311.100 PO, EX
TITLE: "Retroactive Application of a Letter of Map Amendment (LOMA) or Letter of Map Revision (LOMR) to Infrastructure Grants"
PURPOSE: To iterate FEMA policy on the application of flood insurance deductions for uninsured properties located in a special flood hazard area (SFHA) at the time of a disaster when a LOMA or LOMR is requested and obtained after the declaration date.
SCOPE AND AUDIENCE: This policy is applicable to all disasters declared after the date of this policy and to open disasters declared prior to this date, provided a LOMA or LOMR has been requested or obtained within six months of the declaration date and the project application is open. This policy is intended for use by all personnel involved in the administration of the FEMA Public Assistance program.
BACKGROUND: FEMA provides federal disaster assistance for the repair, restoration, reconstruction or replacement of certain public and private nonprofit (PNP) facilities that are damaged by a major disaster as defined in the Stafford Act. In the event that such a facility is damaged by flooding, FEMA may be required to reduce the amount of federal assistance in accordance with the Stafford Act and implementing regulations. Specifically, section 406(d) of the Stafford Act states that if an eligible insurable facility damaged by flooding is located in a SFHA identified for more than one year by the Director and is not covered by flood insurance on the date of such flooding, FEMA shall reduce federal disaster assistance by the maximum amount of insurance proceeds which would have been received had the buildings and contents been fully covered by a standard flood insurance policy. Effective March 1, 1995, the maximum flood insurance coverage limit for commercial buildings is $500,00 and the maximum limit for contents is $500,000. The requirement for a flood insurance deduction is waived when eligible damages to a facility do not exceed $5,000.
There is an exception to this requirement which is specifically noted in the law and in FEMA regulation 44 CFR § 206.252, Insurance requirements for facilities damaged by flood. A PNP facility which cannot be insured because it is located in a community which is not participating in the National Flood Insurance Program (NFIP) may be exempt from the flood insurance reduction, provided the community agrees to participate in the NFIP within six (6) months of the declared disaster and the required flood insurance is purchased.
The flood insurance reduction required by section 406(d) is based upon a facility's location within the floodplain. A SFHA is the land in the floodplain within a community subject to a one percent or greater chance of flooding in any given year. Flood Insurance Rate Maps (FIRMs) are the official maps used to delineate the SFHAs of a community. SFHAs are designated on these maps as Zones A, AO, AH, A1-30, AE, A99, VO, or V1-30, VE or V. FEMA regulations do provide a mechanism in which a community may request changes to the FIRMs. It is, in fact, the responsibility of a community to assist FEMA in keeping a current and accurate record of floodplain boundaries whether it be based on more current information or physical changes to the floodplain or floodways. A change to an effective FIRM is reflected in a Letter of Map Amendment (LOMA), Letter of Map Revision (LOMR), or a republication of the FIRM.
A LOMA removes from the floodplain a specific structure or property that was inadvertently included in the designated floodplain on a community's FIRM. The LOMA states that the structure or property was never in the SFHA. A request for a LOMA is typically submitted by an individual, and must include, among other items, a certification by a Registered Professional Engineer or Licensed Land Surveyor that the lowest adjacent grade of the structure is above the base flood elevation.
A LOMR is an annotated copy of the FIRM which officially changes the floodplain boundaries along certain waterways in the community. A LOMR may be based solely on more accurate and detailed scientific or technical information or on actual physical changes to the floodplain that affect flooding conditions. Pursuant to 44 CFR § 65.3, Requirement to submit new technical data, a community is required to submit new scientific or technical data confirming physical changes within six months after the date such information becomes available. Submission of such information is necessary in order that risk premium rates and floodplain management requirements will be based upon current data.
Once issued by FEMA, LOMAs and LOMRs are incorporated into the official data of record used in all determinations concerning local floodplain development and flood insurance requirements.
The intent of FEMA regulations governing insurance coverage and disaster assistance funding is to encourage individuals, States, and local governments to obtain insurance coverage and thereby reduce their dependence on governmental assistance. FEMA meets this intent by limiting otherwise available assistance to flood-damaged structures located in a SFHA; requiring recipients of federal disaster assistance to obtain and maintain insurance; and prohibiting future assistance if an applicant fails to meet the previous requirement.
FEMA recognizes that more detailed and more accurate scientific and technical information may remove a structure from an identified floodplain, ergo, the administrative procedure for amending and revising current FIRMs. Although a FIRM may identify a facility as being located in a SFHA, a LOMA or LOMR may confirm that the structure is actually excluded from the SFHA. It is not the intent of FEMA to unduly penalize an applicant in a major disaster situation whose facility is determined after-the-fact never to have been in the identified SFHA.
FEMA also recognizes, however, a local community's responsibility, as a participant in the NFIP, to adopt and enforce minimum floodplain management regulations. In addition, FEMA encourages, through the regulatory criteria noted above, sound risk management on the part of disaster assistance recipients.
In recent disasters, applicants have requested that FEMA waive the standard flood insurance reduction mandated by section 406(d) of the Stafford Act when a LOMA or LOMR, which removes a structure from the identified floodplain, is requested and obtained after the date of the disaster. The following policy addresses how and when FEMA should consider a LOMA or LOMR obtained after a declared disaster when applying the flood insurance reduction to Infrastructure grants.
POLICY: The following parameters apply when determining whether a LOMA or LOMR obtained after a declared disaster can be applied to an Infrastructure disaster grant by waiving the otherwise mandatory flood insurance reduction.
FEMA will not apply the flood insurance deduction pursuant to section 406(d) of the Stafford Act if:
A LOMA or LOMR was requested prior to the declared disaster, but FEMA's determination was issued after the disaster.
A LOMA was requested within six (6) months after the disaster was declared and FEMA ultimately granted the LOMA.
A LOMR was requested within six (6) months after the disaster was declared, provided the LOMR was based on more detailed topographic information and not man-made changes to the floodplain or new hydrology.
FEMA will proceed with the mandatory reduction until such time as the applicant has informed FEMA in writing that a LOMA or LOMR has been obtained. Upon receipt of a copy of the LOMA or LOMR, FEMA may reinstate funding, provided the above parameters have been met.
It is the sole responsibility of a Public Assistance applicant to request a LOMA or LOMR if it believes that a structure subject to the flood insurance reduction is not actually located in the identified SFHA per the effective FIRM. Costs incurred in pursuit of a LOMA or LOMR are not eligible for reimbursement.
KEY WORDS: Flood Insurance, National Flood Insurance Program, Letter of Map Amendment, Letter of Map Revision, Special Flood Hazard Areas, Floodplain, Flood Insurance Rate Map.
SUPERSESSION: This policy updates and replaces all relevant FEMA past policy memoranda on this subject.
AUTHORITIES: Stafford Act, Section 406(d), 44 CFR 206.252
ORIGINATING OFFICE: Infrastructure Division, Response and Recovery Directorate
REVIEW DATE: June 1998
William C. Tidball
Executive Associate Director
Response and Recovery Directorate
DISTRIBUTION: Mitigation Directorate, Federal Insurance Administration, Regional Directors, Regional Response and Recovery Division Directors, Federal Coordinating Officers/Disaster Recovery Managers