Remapped floodplains will affect Cy–Fair premiums

Although everyone lives with the risk of flooding in the event of heavy downpours or natural disasters, homeowners within a 100 or 500-year floodplain stand to be significantly damaged by area flooding and are required to carry separate flood insurance policies. With the Federal Emergency Management Agency's plans to remap the floodplain in Cy–Fair next year, hundreds of homeowners may find their properties in the new floodplain.

"Since flooding has been, and continues to be, a serious risk in the U.S., most insurance companies have specifically excluded flood damage from homeowners policies," said Warren Barhorst, CEO of Iscential, a Houston-based risk management, insurance and financial services firm.

Flood insurance is not included in standard homeowners insurance policies, but it can be purchased through various firms or through FEMA's National Flood Insurance Program. This nationwide program has grown since its establishment in 1968 to provide more than $1 billion in coverage to U.S. residents.

In the summer of 2012, U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act, calling on FEMA to make several changes to the NFIP such as changing policy rates to reflect true flood risks of specific areas. Some changes have been put into effect, while others will occur in coming months. These new rules are expected to affect certain homeowners throughout the community by phasing out subsidies for pre-rated properties and eliminating the grandfathered conditions—two aspects that have hurt FEMA's financial standing in recent years, Barhorst said.

"These changes will result in more appropriate premiums for these risks," he said. "More than 80 percent of policyholders do not pay subsidized rates and will not see large premium increases. Future changes to premium rates will occur upon remapping."

Typically, maps are redrawn after large flooding events, Barhorst said. Between 1998–2004, several major flooding events led to previous map revisions. No changes have been made since, but remapping for the Cy–Fair area is scheduled for late 2014.

"If a map is redrawn and your previously 'low-risk' home is now in a 'high-risk' area, two major factors come into play," Barhorst said. "First, your mortgage company will require you to carry flood insurance. Secondly, flood insurance in 'high-risk' areas often costs as much, if not more than, a homeowner's policy."

For an updated online interactive flood mapping tool, visit