What You need to Know About Floods and Flood Insurance for Real Estate
When we appraise a property we will look up the FEMA flood determination of a property and provide a flood map within the appraisal report. If a property is located in a flood zone then we report the flood map #, zone and date of the map. If your property is located in a flood zone then most likely the lender will require flood insurance for the loan. If your property is not located in a flood zone do not assume that you are free of risk for flooding.
What to know about Flood Insurance:
Where do I purchase Flood Insurance?
Flood insurance is provided by the National Flood Insurance Program (NFIP) but it is not purchased through NFIP but from a licensed insurance agent. Check with your local insurance agent. There is a 30 day waiting period for the flood insurance to go into effect. This means that if flooding is about to occur in your area you cannot go and purchase insurance that will cover the event. If your Flood Insurance is purchased at the time of loan origination the 30 day waiting period is waived. Premiums are based on the risk determined from the FEMA Flood Maps. You do not have to be located in a FEMA flood zone to purchase flood insurance.
Doesn't my homeowner policy cover flooding?
No. Flood damage is typically not covered by a homeowners insurance policy. It is a good idea to consider purchasing flood insurance even if you do not live in FEMA Flood Hazard area. As we have seen recently, many areas have been affected by "Flash Flooding" which occurs when heavy rain occurs in a short amount of time. This can happen anywhere.
My home is flooded and I don't have flood insurance. What can I do?
If your area has been declared a disaster area there most likely will be some federal, state, and local programs for assistance. Disaster Relief Assistance information is provided below. You will want try to clean up as soon as the water recedes and it is safe. Proper clean -up following a flood can reduce molds and milder and lessen health risks. If you have experienced a flood that does not mean that you cannot purchase flood insurance. You can purchase flood insurance from NFIP even if your home has flooded.
Disaster Relief Assistance:
Texas Association of Realtors - Texas Relief Fund
Texas Division of Emergency Management -May 2015 Disaster Assitance
Here are some other resources that may be helpful:
Flood Facts from the National Flood Insurance Program (NFIP)
How can I protect myself from a flood- Federal Emergency Management Agency (FEMA)
Surprising facts about flood insurance- Houselogic
Real Estate Flood Insurance- What Buyers and Sellers Need to Know- Bill Gassett, Maximum Exposure Real Estate
My prayers and thoughts are with all who have been impacted by flooding. If you have any questions or additional information please let me know. If you can donate to any of the organizations that are helping with disaster relief please know that any amount is appreciated. Flood photos are courtesy of Mark Stewart.
Don't forget about the Loss Avoidance Measure for people with flood insurance. It is located in the Dwelling and General Property Form under Coverage C which states:
ReplyDeleteC. COVERAGE C—OTHER COVERAGES
1. Debris Removal.
a. We will pay the expense to remove non-owned debris that is on
or in insured property and debris of insured property anywhere.
b. If you or a member of your household perform the removal
work, the value of your work will be based on the Federal
minimum wage.
c. This coverage does not increase the Coverage A or Coverage B
limit of liability.
2. Loss Avoidance Measures
a. Sandbags, Supplies, and Labor
(1) We will pay up to $1,000 for costs you incur to protect the
insured building from a flood or IMMINENT danger of flood,
for the following:
(a) Your reasonable expenses to buy:
(i) Sandbags, including sand to fill them;
(ii) Fill for temporary levees;
(iii) Pumps; and (iv) Plastic sheeting and lumber used in connection with
these items.
(b) The value of work, at the Federal minimum wage, that
you or a member of your household perform.
(2) This coverage for Sandbags, Supplies and Labor only
applies if damage to insured property by or from flood is
imminent and the threat of flood damage is apparent enough
to lead a person of common prudence to anticipate flood
damage. One of the following must also occur:
(a) A general and temporary condition of flooding in the area
near the described location must occur, even if the flood
does not reach the building; or
(b) A legally authorized official must issue an evacuation
order or other civil order for the community in which the
building is located calling for measures to preserve life
and property from the peril of flood.
This coverage does not increase the Coverage A or Coverage B
limit of liability.
b. Property Removed to Safety
(1) We will pay up to $1,000 for the reasonable expenses you
incur to move insured property to a place other than the
described location that contains the property in order to
protect it from flood or the imminent danger of flood.
Reasonable expenses include the value of work, at
the Federal minimum wage, you or a member of your
household perform.
(2) If you move insured property to a location other than the
described location that contains the property, in order to
protect it from flood or the imminent danger of flood, we will
cover such property while at that location for a period of
45 consecutive days from the date you begin to move it there. The personal property that is moved must be placed in
a fully enclosed building or otherwise reasonably protected
from the elements.
Any property removed, including a moveable home described in
II.6.b. and c., must be placed above ground level or outside of the
special flood hazard area.
This coverage does not increase the Coverage A or Coverage B
limit of liability.
Thanks for the additional information Katherine!
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