Steamboat Springs Flabbergasted. That's how Mike Middleton reacted to a letter from his mortgage lender telling him he needs flood insurance for his home.
For more than 20 years, Middleton did not need the insurance because his Riverside home was not considered at risk of being damaged in a 100-year flood.
That changed in February, when the Federal Emergency Management Agency released updated maps showing flood risks for cities and populated areas of Routt County.
Federal law requires that flood insurance accompany mortgage loans for structures in a Special Flood Hazard Area -- a floodplain associated with a flood event that has a 1 percent chance of happening each year.
The National Flood Insurance Reform Act of 1994 aims to reduce the risk of flood damage to properties and the amount the federal government pays for damage to uninsured properties.
Although the maps help prevent risky development in flood plains, they also can pose a headache to homeowners who typically have less than 60 days to purchase flood insurance or face often-inflated rates forced by their lenders.
However, local surveyors and FEMA note that flood-zone mapping is not an exact science: The agency maps areas to such a large scale that inaccuracies are inevitable.
By his calculations, Middleton said, his home is in the 500-year flood zone, but not in an SFHA.
And although his home is about 200 yards from the river, it was built on 20 truckloads of gravel.
Middleton and others who want to contest flood risk designation may apply for a Letter of Map Amendment or file other FEMA documents to requestthat their properties be removed from the SFHA.
Information provided by FEMA about the amendment process notes scale and topographic limitations in the mapping process "may cause small areas that are at or above the flood elevation to be inadvertently shown within the SFHA boundary. Also, the placement of fill may elevate small areas within the SFHA boundaries to an elevation at or above the flood elevation."
Officials encourage home--owners who question designations to pursue the process.
"We really are not interested in people's flood insurance if they are not at risk," said Dan Carlson, a program specialist with FEMA's National Flood Insurance Program.
Applications require materials such as elevation certificates or other survey-related information, and depending on the property, they may require other floodplain studies.
The time and expense involved varies widely depending on the property and process, but local surveyors say they have seen it take anywhere from a month to two years.
In the long run, the process may be worth it to avoid the effects SFHA designation may have on property values.
Mike Larson, vice president of mortgage lending at Mountain Valley Bank, said it makes sense that SFHA designation might affect the value because the insurance makes it more difficult for a prospective buyer to purchase the home.
"A home later discovered to be in a flood zone would tend to deflate the value," he said.
Assessment and insurance
Routt County, Steamboat Springs, Hayden and Oak Creek are among areas that participate in the National Flood Insurance Program.
In exchange for adopting and enforcing flood management standards, participating communities' residents are able to purchase federally backed flood insurance -- the only flood insurance available.
Property owners in communities that do not participate in the program are not subject to federal mandatory flood insurance requirements, but they also are not eligible for federal grants and loans on structures in flood plains.
Flood zone designations are based on FEMA's Flood Insur--ance Rate Maps. The last set of Routt County maps was adopted in 1983. The recent updates are part of a process to revise all Colorado maps, Carlson said.
The maps are a picture version of engineering data measuring flood threats in specific areas. The process involves analyzing rainfall and snowmelt in flood sources and flood risk unique to basins, he said.
Areas within SFHA zones indicate different base flood elevations, or height of the water in a 1 percent annual chance flood event.
Hydrologist Mark Oliver of Basin Hydrology in Steamboat said it doesn't appear the town has experienced such an event in the 94 years the U.S. Geological Survey has tracked stream flow downtown.
FEMA models show the peak stream flow in the Yampa River in Steamboat during a 100-year flood would be about 8,700 cubic feet per second, he said.
The USGS data shows the peak flow at the Fifth Street Bridge was 6,800 cfs in June 1921. The peak in the past 15 years was 5,300 cfs in June 1997.
Carlson, who reviewed the FEMA maps for Routt County, said he didn't recall there being a lot of changes. In fact, the revisions reduced overall floodplain areas in the county, he said.
Officials in Oak Creek and Hayden verified that there were few, if any, changes to maps in those towns.
Maps in Steam--boat are harder to compare, but residents and surveyors have reported seeing changes in zones in Brooklyn, Riverside and near unnamed seasonal streams on the mountain and around Fish Creek Falls.
Scrambling to respond
Map updates have spurred a flurry of calls to insurance agents from homeowners inquiring about flood insurance.
The State Farm Insurance office in Steamboat has seen the same amount of flood insurance business in the past six months as it has in the past six years, agent Debbie Aragon said.
In some cases, the business is coming from homeowners who weren't previously in the SFHA but now are. In a lot of other situations, maps haven't changed, but lenders are finding out homes are in high-risk zones, she said.
Todd Brase is director of marketing for First American Flood Data Services, an Austin, Texas, company that works for lenders in determining whether homes need flood insurance.
When the company receives updated Flood Insurance Rate Maps, it compares properties it tracks in the area with the maps and notifies lenders of any changes in SFHA status.
Brase said the Flood Ins--urance Reform Act of 1994 has been slow to catch on with some lenders, particularly small banks who are not audited and watched by the federal government to the extent that big banks are.
Market research shows about 10 percent of small community banks typically do not have flood determinations on properties, he said. If smaller banks sell mortgage portfolios to big lenders, companies such as First American will review the portfolio in the process.
"Often times we will find holes in the portfolio," Brase said, referring to flood determinations.
In rural areas, it's not uncommon for families with properties that have long been paid off to find out they need flood insurance when they apply for a home loan, he said.
Flood insurance is available only through the National Flood Insurance Program. The program sets the rates, and private insurers sell the policies.
Homeowners who do not purchase insurance from an agent default to insurance purchased through the lender. The forced insurance is almost always more expensive, Aragon said.
The amount homeowners save by getting insurance through an agent depends on the property, but sometimes the savings is drastic: Aragon said she was able to quote a client a rate of $600 a year for a condo off Pine Grove Road, and the lender's rate was $2,000 a year.
Obtaining flood insurance is usually fairly simple because lenders and third party companies such as First American have done most of the research, Aragon said.
A policy may require an elevation certificate from a surveyor, which measures where a structure is in relation to the base flood elevation. The certificate sometimes can help homeowners get better rates, she said.
FEMA's Web site notes that homeowners who are removed from an SFHA may request a refund for insurance they paid during the application process, though lenders still may require flood insurance as a condition of the loan.
In the case of a serious flood, flood insurance may not provide all the protection homeowners need: The insurance covers as much as $250,000 in structural damage and $100,000 for contents.
Additional coverage can be purchased through companies such as Lloyds of London.
Carlson emphasized the flood maps are an important tool for protecting property in flood zones and encouraging smart building in floodplains -- though that is still risky, he said.
"The flood maps are as much a tool to be welcomed as avoided," Carlson said. "Sometimes it's hard to see the value of that."
Jorge Gonzalez with Land--mark Consultants Inc. said the company has done more work this year relating to elevation certificates and flood zones, though he isn't sure whether that's because of the map updates or people getting "more courageous" about where to build, he said.
Gonzalez cautioned people to be aware of flood threats when looking at properties and to consider having a flood survey done on properties next to streams.
"I don't think people understand how much of our town is within a floodplain," he said.
Landmark designed the River Place development on east U.S. Highway 40. In the design stages, the site was not in a flood zone, but the company anticipated it might be in the updated maps.
They were correct, and because they built accordingly, they are applying for a Letter of Map Revision based on fill used to raise structures above the flood elevation in the SFHA.
Overall, it's best to be proactive and not rely solely on FEMA maps in gauging flood risk, Gonzalez said.
"You may be two feet from a (flood) zone, but I would design as if you were in it," he said.
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