Flood Insurance? Here's Everything You Need to Know
Flood Coverage: Part 1 of 2
“The good lord willing and the creek don’t rise.” I had a friend say that to me recently, and it made me chuckle and think about some of the great old timey sayings.
Let’s talk a moment about that creek rising. 2017 saw an estimated $268.2 billion in storm surge and flood damage according to the National Centers for Environmental Information (NCEI), making it one for the record books.
This fact, along with more specific mapping tools, has made getting flood insurance in the private market much more restrictive and expensive. If you need flood insurance, here are two critical pieces of information you need first:
1. The Flood Map. Your lender should let you know that, indeed, your building is considered waterfront. If not, FEMA has made some great upgrades to their website, and you can type in the address to pull the map panel. These panels are drawings that approximate where your building is located. Some MSA’s (i.e. Metropolitan Statistical Areas) also have satellite overlay maps, which show in real time where your building is in relation to the flood zone. Below is a photo of this type of map. Some real estate companies and brokers have access to RiskMeter which will run those maps as well.
2. The Elevation Certificate. Once you know you’re in a flood zone, you must ask the question “Yes, but how deep?” The elevation certificate can tell you. An engineer fills out the elevation certificate that states two important facts:
- If this area does flood, how high will the flood go? This is listed on the certificate as the Base Flood Elevation (BFE).
- Where is the bottom floor in relation to this flood zone? This is listed as Finished Floor Elevation (FFE).
Certificates typically costs $1,300 to $2,300 and often takes two weeks to complete—more remote locations are costlier and require a longer completion period.
After obtaining those two pieces of information, the next question is whether to use the National Flood Insurance Protection (NFIP) or not. If you need the coverage placed quickly—meaning your loan is closing tomorrow or your bank is sending you noncompliant love letters—you’ll want to NFIP. The alternative to NFIP is getting a private carrier to cover the flood. NFIP will be discussed in a later real estate blog post by our very own flood expert, Sonia Aujla. There are some tricky aspects, and it’s important to know the pitfalls.
Good lord willing you won’t have to worry about the creek rising, but if it does, it’s good to know your property is protected. Feel free to contact us if you have some questions about flood coverage.
- Wash Away Worries: Flood Insurance Basics
- Flood Insurance Don't Get Washed Away
- Flood Insurance: Not Just for the Coasts
- Flood Safety Checklist
- Yes, You Can Prepare for Natural Disasters
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