Flood Insurance

Flood Insurance

Kevin
Kevin

July 23rd, 2012, 2:15 am #1

So I am looking at possibly buying some riverfront property. I got a quote for 2900 a year for flood insurance which seems really high to me. I understand that the feds insure all flood policies and insurance companies basically sell it for them. So does that mean all rates will be generally speaking the same or are there savings to be had from shopping around?
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Snowtroll
Snowtroll

July 23rd, 2012, 4:59 am #2

Maybe they're trying to tell you that you really shouldn't have anything on that property that can be damaged by flooding?

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Eric
Eric

July 23rd, 2012, 5:34 am #3

So I am looking at possibly buying some riverfront property. I got a quote for 2900 a year for flood insurance which seems really high to me. I understand that the feds insure all flood policies and insurance companies basically sell it for them. So does that mean all rates will be generally speaking the same or are there savings to be had from shopping around?
The issue with that is repeat catastrophies. Even areas destroyed regularly by hurricanes and floods have people that run right back in to build that beachfront house that will be seen floating away next year.

The Fed gets to make the money back somehow for everyone building on all of these flood areas (high rain areas, beaches, Florida?).
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Kevin
Kevin

July 23rd, 2012, 3:37 pm #4

I did alittle more research and I was looking at the wrong rate chart on NFIP. Apparently somehow I was looking at the coastal chart and not the high risk chart. It came to 1300 a year which is still high I think for a property that only floods during catastrophic events. I honestly think they are artificially raising rates to pay for the south's irresponsible shore houses. But what can I do I love the house and I can swing an extra 100 bucks a month but my wallet is crying in agony lol
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caffiend
caffiend

July 24th, 2012, 4:53 pm #5

Being an insurance agent (don't shoot me), I can offer a little bit of advice. First off is to find out what the Flood Zone is. If it's an 'X' then you'll be in the clear and the rates on that aren't all that expensive.

If it's in a Special Flood Hazard area (zone A, V) then I would recommend checking to see if there is a current Flood Elevation Certificate. Sometimes the local building/permitting departments have them on file. Otherwise it's worth getting one, as how high your home is compared to the local base flood elevation can make a fair difference in the cost of coverage.

The best advice that I can give however is to talk to a local insurance agent who is familiar with the area.
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Andrew
Andrew

July 24th, 2012, 9:37 pm #6

I did alittle more research and I was looking at the wrong rate chart on NFIP. Apparently somehow I was looking at the coastal chart and not the high risk chart. It came to 1300 a year which is still high I think for a property that only floods during catastrophic events. I honestly think they are artificially raising rates to pay for the south's irresponsible shore houses. But what can I do I love the house and I can swing an extra 100 bucks a month but my wallet is crying in agony lol
Flood insurance covers other stuff too, like broken water pipes over flowing toilets, ect. On broken pipe can destroy a house in a few minutes and cost 10's of thousands in damages you'd never expect. I did fire/ flood restoration for a year as a job
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caffiend
caffiend

July 25th, 2012, 2:44 pm #7

Sorry, Andrew, not quite right there. I'm going to get a little technical for a moment.

Specifically, the definition of flood pulled from a standard flood policy packet (as of current- there are some amendments being considered):
Flood, as used in this flood insurance policy, means:
1. A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:
a. Overflow of inland or tidal waters;
b. Unusual and rapid accumulation or runoff of surface waters from any source;
c. Mudflow.
2. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels.

So, no the flood insurance policy won't cover for breakage of water pipes. However one thing to consider is that if you live down-hill from someone with an above ground pool that ruptures, the second it crosses your property line it's defined as flood, and thus, not normally covered under your home insurance policy. Need flood coverage for that.

Now to properly cover yourself for breakage of waterlines, you need to obtain one of the following policy types (or equivalent form as some companies use proprietary forms): DP-2 (Broad-form), DP-3 (Special-form), HO-2 (Broad-form), HO-3 (Special-form), HO-4 (Renters - Broad-form), HO-6 (Condo/Unit-owners, Special-form), HO-8 (Special-form, ACV)

The DP forms are also known as Dwelling-Fire policies (generally cheaper but provide fewer coverages), and the HO forms are the Home-Owners (more expensive, but much more coverage is provided).
Broad-form means that the policy covers for specifically listed causes of loss (aka: perils) such as fire, lightning, wind/hail, breakage of pipes, etc. but if damage occurs outside of the listed causes, there is no coverage.
Special-form means that the home is covered for direct loss of the home or structure regardless of cause, subject of course to the exclusions and limitations in the policy. Read your policy carefully, so you know what they are.

There are some exclusions that are near universal for home insurance policies, specifically: Flood, Mudslide, Mudflow, Landslide, Earthquake & earth movement

Oh.. and if anyone here is renting (especially if you live in an apartment complex or college dorm), I strongly recommend getting the HO-4 Renter's policy.
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Andrew
Andrew

July 25th, 2012, 10:30 pm #8

We just called it flood insurance. I never delt with the billing paperwork. But it is important to have the pipe insurance, seen a lot of people loose a lot because it's silly so it's overlooked a lot. So my previous statement may not have been Germaine to the larger topic at hand, but hopefully brought something to light they might not have been aware of.
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