Flood Insurance….something that we hope we never need to use but are happy to have in the event of rising waters or a hurricane.
Flood zones are government designated land areas that determine the risk factors for flooding of property and have a major impact on the cost of your flood insurance policy. “X” and “B” zones are the “best” zones for flood insurance purposes, i.e. buildings in this area have lower flood insurance premiums. Buildings in these zones may even qualify for the “Preferred Flood Insurance Program” which results in even lower premiums. However, that being said, don’t give up on property located in “A” zones. If your building is one or more feet above the base flood elevation, you may qualify for a lower premium.
A flood elevation certificate will indicate the elevation of your building in relationship to the base flood elevation. The certificate will provide your insurance agent with the information he/she needs to determine the cost of your flood insurance. Any buildings located in “A” zones built after the effective date of the original flood maps for the area, were required to build to at least to the base flood elevation. Homes built before the effective date of the flood maps are considered “pre-firm” and may be subject to higher premiums. However, if you get a flood elevation certificate of the “pre-firm” home, you may discover that the home is actually built at or above base flood elevation and therefore will qualify for a reduced flood insurance premium.
When buying property ask to “assume” the existing flood policy in order to have any of the protective rights under the existing policy. The National Flood Insurance Program is continually making changes and if you can “grandfather in” any rights under an older policy, it may help you in the future.
Don’t be tempted to forego purchasing flood insurance if you are in an “X” or “B” zone. Just because your lender doesn’t require insurance doesn’t mean you may not need it. There are a lot of property owners that were located in “B” and “X” zones during past Hurricanes that wished they had purchased flood insurance! An “X” or “B” zone just means that you can purchase flood insurance for a lower cost!