Flood zone question...
 

We are looking at a lot in a flood zone and have been told by my banker that the govt is pulling out of flood insurance in 2-3 years. The lot isn't in a V zone, but maybe AE. It's been awhile but I remember that for $200 or so you could get $50k with FEMA.

Anybody heard of this and what the alternatives will be? Private insurance?

Why buy in any level of flood zone? Most destructive force of nature. All indications are that the feds, if not getting out of flood insurance, are going to make it pay for itself, which it has never come close to doing in the past. The handwriting is on the wall. Expect rates to climb astronomically with premiums in the many thousands of dollars per year. This prospect is already making real estate sales on the NC coast difficult. When the buyer finds out how much the required flood insurance will cost it is no sale.

We live in a coastal town so just about everything nice is in a flood zone, but your point is noted.

My home city had one of the biggest floods in history last year, and I wouldn't buy any property that is lower than 30' above a flood plain.

About 180,000 Albertans were displaced.

It's just not worth it.

With changing weather patterns those once in a hundred year floods are happening every five years. I'd not buy the land and get out of the other area while you can still find a buyer

I don't think the government is getting out of the insurance dept, I think they are counting on the premiums in the future with the probability of little to no flood claims. They are rezoning here, some folks that will never get flooded out are being informed that they are now being zoned into the flood plain, and they will be required to buy flood insurance at ridiculously high premiums.

There are some very pissed off people, and they should be.

As far as I know, you are required to have flood insurance if you have a mortgage, but it can be either gov't insurance, or private. And the premiums are skyrocketing right now. What was recently a few hundred dollars per year will soon be up to $8K per year.

Because of this, I have been hired by lots of people in nearby flood zones to certify that their bottom floor is at least 1 foot above the 100-year flood elevation. (I'm an engineer with surveying equipment) Some houses are above the flood zone, some are not. Many houses have been raised a few feet to be safe.

It's a small lot and we were going to do a drive under, so the house would be well above the min required elevation.

$8k for insurance? Wow!

OWWWWW!!!! i just bumped my head on the sky!!!
It's falling!

Going by your level of sarcasm.. You don't think my advice is good? With your phenomenal level of intelligence, what do you recommend?

We have a small winter home north of Tampa , 1100 sq ft concrete block on a slab built in 1974. About a mile from the water It,s 10.79 ft above whatever they measure to. I would guess it,s 10 ft above average high tide but don,t know for sure.
Since we only paid $33500 for the place we didn,t put any insurance on it except we bought $10k of flood insurance . That would replace appliances and perhaps some flooring and cabinets if there were a ft of water in the place. Costs about $390 per yr. We asked a neighbour who had been there 25 yrs and they had one storm which flooded the street and came within an inch of their back door. With that in mind we felt flood is our biggest risk.
A regular home owner policy with fire/theft/and wind would have added $1400 more .
There are neighbours with a mortgage in a slightly larger home and they pay about $4800 per yr for all the insurance they are required to carry.

Yup. I have a condo that is above a dam. Water goes over the top of the dam before it comes in the house, or that is what it did last time it flooded. It is practically impossible for that place to flood. They rezoned it in 2002 and it is now in the 100 year flood plain. It is pretty aggravating.

It is a condo, and to get the survey with elevation, you would have to pay for all 10 units in that building.

My house in Mo was in a flood plain. I was 7' above the base flood level and the insurance for $250,000 was $340 a year. The house I'm buying in Florida is 1' above the base flood level and insurance for $250,000 is $550 a year. $250,000 is all that FEMA will insure.

The rates are high and going higher for those homes not built in compliance with the flood requirements. If your building new it won't be a problem.

930Rocket, I am in the insurance business along the New Jersey Coast. a large portion of my business is flood insurance. The Gubmint aint pulling out of the flood insurance business any time soon and definitely not in the next 2-3 years or 5-10 years. They are switching from subsidizing rating to actuarial rating so premiums and deductibles are changing.

First you can not buy insurance (other than liability) on a vacant lot. Your flood rates will be based upon the structure that you build and if it is in compliance with the guidelines.

It mat be possible that at some time you could buy $50K of insurance for $200.00 or so but there are variables that would dictate that.

Fukashima was behind a flood wall and so was New Orleans.
Maybe flood zones maps aren,t conservative enough.

Thanks for the info guys. We wouldn't need the flood insurance until the house is built, not on the lot itself. I was concerned about the future with us in it or selling in a few years and having something nobody could get insurance on. As I'm the builder, I just wanted to get some good info.

If someone builds in a flood plain or an area prone to flooding the government should have nothing to do with any structure on it.
I remember when NJ went under and the news was interviewing people who just lost their homes and this one woman said, she had done her homework and that house hadn't flooded in fifteen years. Wait, you mean I have to have my taxes and insurance go up because you want to live somewhere where water can get and do damage? New Orleans, same thing, you are living below seal level and on the coast, sorry but even my dumb self can see that math doesn't add up.
If someone insists on living in an area like that the insurance should be private.

+1 what dr coastline said. Been doing flood insurance and floodplain management for 22 years. There are arguments for and against government run insurance. The Feds are doing much better to protect the taxpayer, but at the expense of flood insurance premium payers, which is where the risk should be placed. Build well, use the FEMA Coastal Construction Manual as a guide. Make sure you buy structure and contents coverage

I've been told loyds of London is writing policies for less.

I own three places in Charleston County, all in Zone AE. What all do you want to know? The big changes I've run into in general are that you can't grandfather in flood insurance anymore, and that an elevation cert (~$300) is required when buying if the elevation of the ground is in a flood zone.

Also, as policies for the two rentals have renewed my insurance (Allstate, who deals with specialty insurance companies) has wanted an elevation cert at the time of policy renewal. The guy who does the elevation cert comes out and surveys everything - the ground level, the elevation of the living space, any mechanicals (HVAC/water heater/...), and notes flood vents.

Base flood elevation is generally 13 feet. The low point of one lot is about 11 feet, but the living space is about 4 feet higher than that and my rates went up about $300/year because I lost the grandfathered policy. The other one has living space at 12.6 feet but I had an elevation cert done when I bought the place because I thought it might have been higher and elevation was already factored in to the existing policy. I don't remember the number for flood insurance but it really isn't bad either.

I'll probably have to get one done for my primary residence at some point but it should be the same, where the living space is above base flood elevation but the ground is not. The rules for investment properties changed immediately and they're being phased in for residential. The ones who are really going to get hit with high flood insurance policies are the ones in V (flood + storm induced waves) who have a nonconforming property, or anyone in AE with living space well below base flood elevation. Those low lying areas would already be in V for the most part anyway.

I can have a look at the details on our policies if the data points would help, to see how much is covered vs. what the cost is. It would be relevant to your situation since we're in the same county.