Tag flood

5029344-money-concept-showing-us-dollar-sinking-in-waterIn last week’s post, we discussed the different flood zones and what they mean for your property.  Remember, all properties and homes in the US are in a flood zone.  Here is a quick refresher of the three current flood zones:

  • An “X” zone is considered non-hazardous and lenders do not typically require flood insurance in these areas. “X” zones are supposed to have less than a 1% chance of flooding each year.
  • “AE” zones are considered moderately hazardous, and lenders will typically require that flood insurance be obtained in these zones.
  • “VE” is considered the most hazardous – high-velocity or high-risk, and a lender will typically require flood insurance be obtained in these zones. These coastal areas have an additional hazard associated with storm waves, and have a 26% chance of flooding over the life of a 30-year mortgage.

Once you determine your property’s flood zone, you and your agent can determine the cost of coverage.

Coverage in “X” zones will run approximately $400 +/- per year depending on the size of your home.

In an “AE” zone, homes built to a positive elevation or with proper flood venting (more on that in a minute) will cost approximately $500 – $600 per year.  Homes built to a negative elevation could cost as much as $2000 per year, or more.  Beware – a full or partial enclosure under an elevated home can cause the home to be rated at a negative elevation.

In a “VE” zone, homes built to a positive elevation will typically run between $2,000 – $4000 per year. Homes built to a negative elevation can run as high as $6000+ per year.  Beware – a full or partial enclosure under an elevated home can cause the home to be rated at a negative elevation.

When building or buying a home, you will want hire a surveyor to create an elevation certificate which will determine the elevation and flood zone of the dwelling.  Please remember that an enclosure underneath an elevated home (like a bathroom, enclosed storage room, additional bedroom, elevator, etc.) may cause the entire home to be rated at the elevation of the enclosure rather than the elevated floor.  So while that elevator may be a great convenience for moving groceries into the house, know that it can cost you significantly more in flood coverage.

Proper flood venting is also important, as this helps to reduce pressure by allowing floodwaters to move through your enclosure, thus causing less damage from a flood event.  Breakaway walls for enclosures (as opposed to fully finished walls with studs, drywall, etc.) can also be a good idea as these will simply pull away from the pilings during a flood event and not cause additional damage to the structure.

If you must have an enclosure, here are some general rules to keep you out of trouble.  In an AE zone, the square inches of flood vents should be equal to or greater than the square footage of your enclosure.  The walls should be breakaway and have less than 20 linear feet of finished wall space.  In a VE zone, your enclosure should be less than 300 square feet, made of breakaway walls, and have less than 20 linear feet of wall space.  While flood vents may help to reduce damage in a VE zone, they do nothing to help reduce your flood insurance costs – only in an AE zone can they help to reduce costs.

The current maximum coverage amounts allowed through the NFIP (National Flood Insurance Program) are $250,000, for the dwelling and $100,000 for contents in a single family home; however, excess flood programs are available through other carriers such as Lloyds of London.  As always, it’s vital to have a good agent who can help to mitigate your costs and ensure your properly covered.

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Information courtesy of Selective Insurance, photos courtesy of AL.com

President Obama Signs the Homeowner Flood Insurance Affordability Act of 2014 

On Friday, March 21st, HR3370, also known as the Homeowner Flood Insurance Affordability Act of 2014 was signed and approved by President Obama. This bill introduces changes to the NFIP (National Flood Insurance Program) that would address some of the unintended consequences resulting from the implementation of the Biggert-Waters Reform Act of 2012 (BW12).


Some of the major elements that Homeowner Flood Insurance Affordability Act of 2014 looks to address include:

• Preventing FEMA from raising average rates above 15% for a class of properties and above 18% on individual policies per year.

• Rescinding provisions in BW12 requiring policyholders to pay the full-risk rate for Pre-FIRM properties at the time of purchase.

• Rescinding provisions in BW12 requiring Pre-FIRM property owners to pay the full-risk rate if they voluntarily purchase a new policy.

• Rescinding provisions in BW12 terminating grandfathering.

• Requiring FEMA to refund policyholders for ‘overpaid’ premiums.


At this time, FEMA and the NFIP are actively working to analyze the changes this new law brings and determine how each element will be implemented, however industry analysts believe it may take 12-18 months to implement those changes and to begin issuing any refund checks.

SSIA will continue to monitor updates to this program, and share them here and on our social media sites.


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From an article posted January 30, 2014 at 10:55 AM by The Associated Press on al.com

WASHINGTON (AP) — Hundreds of thousands of homeowners facing big flood insurance premium increases would see those rate hikes delayed for years under legislation that’s set to pass the Senate.

The bipartisan legislation comes amid protests that it would undo hard-fought reforms passed less than two years ago to stabilize the government’s flood insurance program.

The legislation scheduled for a vote Thursday would delay for up to four years huge premium increases that are supposed to phase in next year and beyond under new and updated government flood maps. It also would allow homeowners to pass below-cost policies on to people who buy their homes. People who have recently bought homes and face sharp, immediate jumps in their premiums would see those increases rolled back.

The measure faces a rockier climb in the GOP-controlled House, where Speaker John Boehner, R-Ohio, and Financial Services Committee Chairman Jeb Hensarling, R-Texas, prefer a more modest approach.

At issue is the government-run flood insurance program, in which taxpayers and other homeowners subsidize below-risk rates paid on older homes in both coastal areas threatened by hurricanes and big storms and inland areas near flood-prone rivers. A sweeping overhaul that passed virtually unanimously in 2012 was designed to make the federal flood insurance program more financially stable and bring insurance rates more in line with the real risk of flooding.

Opponents of the new legislation says it essentially unravels reforms to the much-criticized flood insurance program that put taxpayers on the hook for $24 billion in losses by subsidizing ownership in risky areas. The changes were aimed at making the program more financially sound and to quit requiring homeowners in less risky areas to essentially subsidize below-market insurance rates for homeowners in locales more at risk of flooding.

However, projections of what the new rates will be have caused anxiety among hundreds of thousands of homeowners. The loss of subsidies when homes are sold has put a damper on the real estate market and threatened home values. Some homeowners are caught in a Catch-22. They face rates that, once phased in, they won’t be able to afford. But because of the higher insurance rates, they also face having to sell their properties at distressed prices.

For instance, a North Dakota couple, Allison and Kyle Skari, bought a home in Grafton a year ago and initially paid $901 a year for $100,000 of coverage. They were hit with a $4,200 bill now and tell Sen. Heidi Heitkamp, D-N.D., that they never would have bought the home. They’re ineligible for a phase-in of the higher premium because they bought after the 2012 law was passed, but would get relief under the Senate bill.

The Senate measure would delay many of the changes and is likely to pass after votes on a host of amendments. One, by Sen. Pat Toomey, R-Pa., would proceed with the premium increases but cap them on most properties — including homes being sold — at 25 percent per year until the premium reflects the true flood risk. If faces almost certain rejection, though Toomey said it lines up with what the Obama administration wants. The administration said in a statement it “strongly supports a phased transition to actuarially sound flood insurance rates.”

There’s no relief in the offing for 1.7 million owners of second homes, who are not covered by the Senate bill and who face annual 25 percent increases — provided they owned their home before Congress overhauled the program in 2012. They say the premium hikes threaten the viability of older beachfront towns.

The program helps 5.6 million policyholders, 20 percent of whom receive subsidized policies for older homes built before communities joined the flood insurance program

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