Is Your Home In A Flood Zone? Five Steps You Can Take to Save Money!
Has this ever happened to you or someone you know? FEMA has just mapped your house into a high-risk flood zone. Since your home is now in the high-risk flood zone, you need to pay thousands of dollars in flood insurance rates. What do you do now?
First of All, don’t panic and get the facts and take action! Here are a few ways to reduce your risk of flood damage and lower your flood insurance payments and save thousands of dollars:
- Understand the Terms – If you need to get flood insurance, it helps to understand the terms in the policies. Here are two important terms you need to know and understand:
Base flood elevation (BFE): The elevation at which there is a 1 percent or greater annual chance of flooding. The higher your house’s elevation sits above the BFE for your neighborhood, the lower the flood risk. FEMA uses this elevation to determine your home’s risk.
Special flood hazard area: If you’re just now finding out that your house is high-risk, your lender probably sent you a notification that it’s in a special flood hazard area. This area is based on the base flood elevation and can determine your flood insurance rates.
- Check the Map - If you believe there’s been a mistake regarding your house’s placement in a flood zone, take a look at FEMA’s maps. The agency’s online map service center can provide you with the basic information you need. It will tell you the base flood elevation for your house’s location. Use these maps, as they aren’t the official Flood Insurance Risk Maps that FEMA uses to determine risk. Also, flood zone maps are changing all the time. Your home may be in a flood zone yesterday and today they are not. Constantly check the maps!
- Get a Professional Opinion - If you intend to challenge your house’s position on the flood map, you must first send a Letter of Map Amendment request to FEMA. Second, you should hire a licensed land surveyor to perform an elevation survey and determine the official risk for your property.
- Consider a Preferred Risk Policy – Flood insurance is a mandatory requirement by most mortgage holders. If you must buy flood insurance, consider purchasing a Preferred Risk Policy. Here are the advances to buying a Preferred Risk Policy:
- Time before maps are active. Most preliminary maps take 6 to 12 months to take effect, according to the National Flood Insurance Program. FEMA recommends purchasing a Preferred Risk Policy during that time, which can provide coverage at a lower cost. The premium for a Preferred Risk Policy can reach as low as $128 per month, according to FloodSmart.gov. The NFIP recently extended eligibility for Preferred Risk Policies to apply to properties remapped on or after Oct. 8, 2008.
- Grandfather in old rates. If you buy a Preferred Risk Policy before the new maps go into effect, you may renew your lower rates for 2 years. In the third year, you potentially can qualify for low-to-moderate risk rates instead of high-risk rates.
If you already have a flood insurance policy and the base flood elevation has increased in your area, your premiums could increase. Grandfather rules, however, allow you to use the earlier elevation to calculate rates, as long as you’ve maintained continuous flood insurance coverage on the property.
You also can use grandfather rules if you can prove that your home was built in compliance with the flood map that was in effect at the time of construction, according to FloodSmart.gov.
- Invest in Flood Vents – Many homeowners don’t know there is a small investment they can make to save money on their flood insurance premiums. The investment is to simply buy flood vents and install in their foundations. The FEMA compliant flood vents are a simple, affordable and energy efficient solution to protect structures from the potential destruction of natural disasters resulting in flooding. By making a small investment in a set of flood vents, you will save thousands on your flood insurance and substantially bring down your monthly premiums.
All is not lost when you home is determined to be in a flood zone. As you can see, there are actions you can take to substantially bring down your premiums. Take these five steps and you too will be enjoying saving on your flood insurance.