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Flood Insurance Policies
Typically, flood insurance is a separate policy dedicated solely to safeguarding against flood damage. Since standard homeowners insurance policies usually exclude coverage for floods, it becomes the responsibility of your lender to ensure that a flood insurance policy is in effect, if the primary structures on your property fall within a high-risk FEMA flood zone area.
Designated Loans
A designated loan is a type of loan where the lender requires the borrower to obtain and keep a flood insurance policy. Lenders commonly engage third-party companies known as Flood Vendors to assess whether the property and its structures are situated in a FEMA-designated "high-risk" flood zone area by interpreting FEMA flood maps.
Inaccurate FEMA flood maps
Flood maps are often found to have flaws. Fortunately, FEMA provides a means to contest these maps through a process known as a Letter of Map Amendment (LOMA). What's even more beneficial is that is that you don't necessarily need an Elevation Certificate for this process. The use of LiDAR data has now been approved as an alternative method to challenge a FEMA flood map.