Flooding can happen just about anywhere in the US. uu. and can occur in both flood-prone areas and areas that are not in flood zones. According to FEMA, flooding is the most common and costliest natural disaster in the United States, with 98% of counties in the country having experienced a flood at some point. The agency has processed more than 2.5 million claims since the inception of the National Flood Insurance Program (NFIP) and has paid $72.4 billion in claims since 1978.
With more instances of extreme weather recently due to climate change, flooding may soon become even more common across the country. That’s why homeowners need to be aware of the risks that come with flooding and plan their insurance needs accordingly. Flood insurance is a crucial part of protecting your home from flood damage, but it’s not part of a standard homeowners insurance policy. it is a separate type of coverage that is quite different from your typical homeowners insurance policy. Here are some important things to know about flood insurance.
Reading: What to know about flood insurance
1. you may need to get flood insurance
Those who live in high-risk flood zones, designated by the letters a or v on a map or flood insurance rate sign, are generally required by their mortgage lenders to purchase flood insurance. flood coverage is separate from standard homeowners insurance.
Most homeowners insurance will cover water damage from a burst pipe, but not torrential rain, swollen rivers, or flooding from a natural disaster.
Homes located in high-risk areas typically require an elevation certificate, or CE. the ec shows how high your home is relative to how high floodwaters will reach in the event of a major storm. this gives insurance companies an idea of how much risk is involved, which can affect your premium.
Sellers typically bear the cost of the EC, which involves having a surveyor come to the property to measure the elevation, according to Louise Rocco of Exit Bayshore Realty in Tampa. however, if the seller had already completed an EC, this may be sufficient.
2. nfip insurance can protect you from flood losses
The National Flood Insurance Program (NFIP) was enacted in 1968 to provide flood insurance to homeowners, renters, and businesses. It is administered by FEMA and offers flood insurance to those in communities that have adopted and enforced a floodplain management ordinance, which includes more than 23,000 participating regions. This type of flood insurance can be expensive, but in many high-risk areas, NFIP plans may be the only option for purchasing flood insurance.
If you can’t buy flood insurance through regular channels, it may be worth talking to your insurance company to find out if they sell NFIP policies. however, it’s important to note that there is a 30-day waiting period after purchasing a policy before coverage becomes available, so it’s best not to wait to purchase your policy until there’s a storm on the horizon. In most cases, you’ll pay your flood insurance premium annually, rather than monthly.
3. flood insurance is often cheaper outside of flood zones
Even if your lender doesn’t require you to get flood insurance, you may want to consider it. For homes that are near high-risk areas, insurance could be a lifesaver. The NFIP estimates that 40% of claims originate outside of high-risk flood zones and are typically due to issues such as recent construction, fires, or a broken dam.
“Flood insurance is a bargain when you consider the potential loss. one foot of water in an average home can cause $72,000 worth of damage,” says chris orrock, public information officer for the california department of water resources.
pro tip: don’t wait for a storm to get closer to buy insurance. Most flood insurance policies have a 30-day waiting period before coverage kicks in.
For people who are not in high-risk flood areas, the cost of insurance is likely to be more affordable. The NFIP Preferred Risk Policy Program offers low-cost policies for homes that have a low to moderate risk of flooding. these are designated by zones b, c or x in a company.
“For example, $250,000 of coverage, on a home with a basement, costs $386 per year. For just over a dollar a day, this could be the best investment you make all year,” Orrock says.
Flood insurance rates are based on several factors, according to the nfip, including:
- year of construction of the building
- building occupancy
- number of floors
- location of your content
- type of flood zone
- location of lowest story relative to base flood elevation on fema flood map
- deductible and amount of building and contents coverage
what is a flood zone?
is flood insurance required?
Is flood insurance worth it?
does my homeowners insurance policy include flood insurance?
4. research local flood history before buying
experts agree that if it rains, it can flood. Even one of the driest places in America, Death Valley, has seen dangerous flash floods.
Before you buy a home in a flood zone, it’s important to understand how much risk you’ll be taking.
“one of the reasons people buy in florida is because they want waterfront property and that waterfront property is always going to be in a flood zone. and even things that say they’re not in a flood zone might be. the best course of action is to research the property yourself and ask lots of questions,” says rocco.
inundation zone information is usually found on the ths list. issues such as drainage problems or flooding should be disclosed.
“Sellers are required to disclose flood-related information, such as whether or not the property has been flooded before,” says bixby.
People in higher risk areas will pay more for insurance, so this is something to keep in mind when looking for a home. Buyers should talk to their lenders about any contingencies associated with buying in a flood zone.
“Some lenders may require you to pay a year’s worth of flood insurance up front,” Rocco says.
5. flood zone risk levels are not guarantees
Low risk areas are x and c. sometimes the x-zones will be shaded, indicating that a barrier, such as a levee or dam, has been built to reduce the risk of flooding. Of course, these structures are not a guarantee that flooding will not occur.
“If you’re protected by a lien, even if you meet FEMA standards, there’s a 25% chance over the life of your mortgage, about 30 years, that you’ll fail,” Orrock says.
a and v = high risk
d = undetermined risk
b and x (shaded) = moderate flood hazard
c and x (no shading) = minimal flood risk
6. learn what it takes to protect your home from flooding
If you fall in love with a property, but want to mitigate flood risks, you can always make changes that help reduce flood damage. these modifications can be major structural changes or small tweaks, from putting the structure on stilts to adding concrete blocks under the water heater.
Talk to your agent about negotiating the costs of these flood mitigation upgrades with the seller.
“You can raise the building to make sure no water gets in. You can even raise it so the lowest floor is above the flood stage,” says Nick Ratliff, associate broker at Better Homes and Gardens Real Estate Cypress in Lexington, Kentucky. “these are things you can talk to your agent about if you are in a flood zone.”
Depending on the risk level of your prospective home, small changes can make a big difference. A general rule of thumb is to make sure water flows away from the house and doesn’t pool in pools.
for example, make sure the downspouts are facing away from the structure. runoff from gutters should not collect near the house, which could eventually cause basement leaks. if you see this, check with your agent or seller.
“check the pipes and gutters. make sure they are clean. place air conditioning units on concrete blocks, above the flood level. this will help protect your home and your appliances,” says rocco.
You can also get help from your nfip policy to help protect your home from flooding. If a storm is expected, NFIP policies can pay up to $1,000 for “reasonable expenses” such as water pumps, plastic sheeting, lumber, and sandbags.