Insurance Glossary

LOMA

Property

Definition

Letter of Map Amendment - an official document from FEMA that removes a property from the Special Flood Hazard Area when it is shown to be at or above the Base Flood Elevation. A LOMA is issued when a property was incorrectly included in the flood zone on the Flood Insurance Rate Map due to natural grade elevation. Property owners must submit an application with elevation data certified by a licensed surveyor or engineer. Once approved, a LOMA eliminates the mandatory flood insurance requirement for federally backed mortgages and may significantly reduce insurance costs. LOMAs are permanent unless the FIRM is revised. Similar letters include LOMR (Letter of Map Revision) for map changes based on physical alterations.

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Related Terms

FIRM

Flood Insurance Rate Map - an official map created by FEMA that shows flood risk zones, base flood elevations, and floodplain boundaries for a community. FIRMs are used to determine flood insurance requirements and premium rates under the National Flood Insurance Program. These maps identify Special Flood Hazard Areas where flood insurance is mandatory for federally backed mortgages. Property owners can use FIRMs to understand their flood risk and make informed decisions about insurance coverage and property improvements. Maps are periodically updated as flood risk data changes.

Special Flood Hazard Area

High-risk flood zones designated by FEMA where there is at least a 1% chance of flooding in any given year (also known as the 100-year floodplain). Properties located in SFHAs and secured by federally backed mortgages are required by law to carry flood insurance. These areas are shown on Flood Insurance Rate Maps (FIRMs) and include Zone A (riverine flooding) and Zone V (coastal flooding with wave action). Buildings in SFHAs face significantly higher flood insurance premiums than those in moderate or low-risk zones.

Base Flood Elevation

The computed elevation to which floodwater is anticipated to rise during a base flood (a flood with a 1% chance of occurring in any given year, also called a 100-year flood). Shown on FEMA Flood Insurance Rate Maps (FIRMs), the BFE is used to determine flood insurance premiums and building requirements. Structures built below the BFE face higher insurance costs and greater flood risk. Local building codes typically require new construction in flood zones to have the lowest floor elevated at or above the BFE. Knowing your property's BFE is crucial for flood risk assessment and insurance decisions.

Actual Cash Value

The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.

Depreciation

The decrease in value of property over time due to wear, tear, age, or obsolescence.

Replacement Cost

The cost to replace damaged or destroyed property with new property of similar kind and quality, without deduction for depreciation.

Homeowners Insurance

Insurance coverage that protects your home and personal property against damage, theft, and liability claims.

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