What does 'grandfathering' refer to in flood insurance rules?

Grandfathering in flood insurance rules refers to an exemption for certain pre-existing structures in flood zones. This concept allows buildings that were constructed before floodplain management regulations took effect to remain insured at older rates or standards. By "grandfathering" these structures, policyholders can avoid the more expensive coverage that would apply if the building were subject to the newer floodplain management rules that may require stricter compliance.

This practice is important as it provides some level of protection and financial savings for homeowners whose properties were built before current floodplain regulations were established. It acknowledges the fact that many older properties may not comply with current standards but still have historical value or unique circumstances justifying their continued use without complete renovations.

In contrast, the other options do not accurately capture the definition of grandfathering. Insuring buildings that are more than 100 years old does not specifically relate to their status in relation to flood insurance regulations. Likewise, a policy for new builds in flood risk areas does not pertain to grandfathering since it is focused on new construction instead of existing properties. Finally, the requirement to upgrade old buildings to new codes suggests a mandate for compliance which directly opposes the notion of grandfathering that offers exemptions based on prior conditions.