Image by David Mark from Pixabay
Do I need Flood Insurance?
· Everyone is at risk for flood and anyone can get flood insurance. However, if you are financing the purchase of your home, the financing company is likely under federal requirements to compel you to purchase flood insurance if you are in the 100 Year Flood Plain.
· Flood insurance should be one of your first concerns when listing your house or shopping for a new home. The regulations and pricing are constantly changing.
How can I tell if I am in the 100 Year Flood Plain (The Flood Zone or Zone A/AE)?
· Everyone is in a flood zone as floods can happen anywhere! You are in the Special Flood Hazard Area if your home (or the portion of the home considered for flood insurance) is below the level of the 100 Year Flood Plain also known as the BFE or Base Flood Elevation. This is called zone A/AE. This is the Flood Zone where lenders will mandate the purchase of flood insurance.
· You can determine if you are in Zone A/AE by contacting your Real Estate Agent, your Loan Originator or your Insurance Agent. If you want to check yourself, try https://msc.fema.gov/portal/search.
What is an Elevation Certificate?
· An Elevation Certificate is what FEMA and flood insurance companies use to determine the effective elevation of your house in relation to the Flood Zone. The Elevation Certificate determines your flood insurance premium. An Elevation Certificate can be the difference between paying $5,000 and $500 in flood insurance premium.
· You can obtain an Elevation Certificate by contacting the office of Building Inspection, checking with the previous homeowner or using a local surveyor that is certified. Your county often carries a listing of surveyors who are certified to complete Elevation Certificates.
· You can get an Elevation Certificate prior to completion of construction using the plans developed by your architect. You will also need a final Elevation Certificate after construction has been completed. There will be a charge for the initial and a charge for the final Elevation Certificate.
· The typical elevation certificate will cost between $600-900 in our area.
What is a LOMA (Letter of Map Amendment)?
· A LOMA actually amends the flood map at the location of your building. If you have increased the grade of your property to raise the entire structure, including any substructure or basement, above the Base Flood Elevation, the map can be amended to remove your property from the 100-Year Flood Plain. This will remove the federally mandated requirement that you purchase flood insurance.
· If you receive a LOMA, you can continue to carry flood insurance at a much lower cost because you have significantly reduced your exposure to flood damage.
· A LOMA will typically cost between $500-750 in our area, along with any necessary FEMA required fees.
Is Flood Insurance Transferrable?
· Yes. If you purchase a home that already has flood insurance on it and if you will live in the home more than 50% of the year, you may be able to transfer the policy.
· This can be more cost effective as some pricing and provisions are grandfathered into the FEMA National Flood Insurance Program.
By Brennan Madison