Periodically, federal flood insurance maps get updated. In the aftermath of recent storms, the Federal Emergency Management Agency has been updating flood maps to reflect new risks. While the impact of federal flood insurance maps on residential properties and residential property lending is well-known, they can have an equally significant effect on commercial properties and their loans.

Hurricane Sandy flooded the ground floors and basements of office buildings in lower Manhattan as destructively as it wiped out vacation homes on the Jersey Shore. When a 16-inch pipe broke in a shopping center in suburban Seattle, businesses were threatened just like homes would be. Once, insurance policies would throw in flood coverage or add it for every low prices. Flood insurance coverage through the National Flood Insurance Program now carries fewer subsidies than before, leaving some businesses to pay more.

As FEMA reissues federal flood insurance maps, some areas will win and some will lose. For example, parts of the New Jersey short are being removed from the riskiest “V” zone. At the same time, parts of Palm Beach County in Florida could have their flood risk upgraded, increasing the cost of flood insurance premiums. The impact on your commercial property will depend on where it is located and whether or not its flood risk is being increased, decreased or left alone.

One way that commercial property owners can mitigate the risk inherent in the new federal flood insurance maps is to audit their actual flood risk. Many properties are inappropriately classified. Having a building that sits at an adequately high elevation classified as a risk could lead to thousands of dollars in wasted insurance premiums that encumber owners or tenants. On the other hand, having a building that isn’t safe misclassified in a lower flood risk area exposes its tenants and its owner to the risk of flooding without having insurance to cover it. With this in mind, the new federal flood insurance maps aren’t just a potential inconvenience. They are also an excellent opportunity to have your true risk assessed so that you can optimize your coverage.

For more information, contact AmeriFlood Solutions online or via telephone (561-922-9735) for a complimentary flood risk evaluation.

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