Grandfathering

Next, we will learn about the NFIP "grandfather" rules. Grandfathering allows premium benefits after: 

  • Changes in map zones
  • Changes to compliance standards

Grandfathered rating is used in conjunction with flood map changes—it allows buildings to be rated using the flood zone from a prior map. Grandfathered rating does not change what flood zone a building is actually in, but it can change what zone it is rated in. When more favorable, some buildings can be rated based on a previous Base Flood Elevation. In essence, it allows property owners to lock in a previous flood zone or Base Flood Elevation. This is done using either the Continuous Coverage Rule or the Built-In-Compliance Rule.

Under the Continuous Coverage Rule, if a policy is purchased prior to the effective date of the new map, then it can be rated based on the prior map’s flood zone or Base Flood Elevation. As the name implies, continuous coverage must be maintained. The Continuous Coverage Rule applies to both Pre-FIRM and Post-FIRM buildings.

The second grandfathering option is called the Built-In-Compliance Rule. If a building was built in compliance with the map that was in effect at the time that it was built, then the building can be rated using that map’s flood zone or Base Flood Elevation. Proof must be submitted to the carrier. Continuous coverage is not required for this option. This grandfathering option applies primarily to Post-FIRM buildings.