The need for Elevation Certificates and Letters of Map Amendments (LOMA) are increasingly more important to home owners and commercial real estate investors due to the rising cost of flood insurance rates. Over the next few years, rates are on schedule to rise at alarming rates.
The National Flood Insurance Program (NFIP), established 1968 in response to increasing federal government spending for disaster relief, is intended to mitigate public financing of federal government disaster relief payments. Standard real estate insurance does not cover flooding and therefore offers no protection from flooding due to natural disasters. The NFIP mandates that federally regulated or insured lenders require flood insurance on properties in high risk flood areas. This mandate has a devastating effect on the ability to refinance or sell a property.
The NFIP is now insolvent due to the storm events of the last 15 years. Most property owners who were receiving subsidies when the law was enacted will see their subsidies reduced and their premiums rise over the next three years.