Last week’s home post outlined some of the questions I’ve been asked about flood insurance and the answers I’ve given (see https://wiseinsurancegroup.com/questions-answers-flood-insurance/). This week, I want to answer one more question, and that is, “Who needs flood insurance?” I don’t believe everyone needs it, however, there are some who do whose home may not even be in a flood zone.
Required Flood Insurance: Anyone who has a mortgage and whose home is located in a required flood zone such as an A or E will be required by their mortgage company to obtain and maintain flood insurance. Many home buyers may not know the home requires flood insurance until the option period has expired. My recommendation to new home buyers is to have your agent pull a flood zone determination before the option period expires.
If the home is in a required area, have your agent provide a flood quote based on the home’s replacement cost so you can factor it into the overall insurance and ownership cost. I also recommend you consider obtaining an elevation certificate either from the seller if they have one, or ordering one. This certificate will tell you where the top of the home’s foundation is in relationship to the flood level. If it’s above, the flood insurance will cost much less than if it’s below flood level.
Recommend Flood Insurance: There are a number of people I’ve written flood insurance for whose home doesn’t reside in a mandatory flood zone, but agreed with my recommendation. For instance, anyone living in one of Texas’ coastal counties should consider flood insurance due to the possibility of a hurricane or tropical storm.
Hurricanes can bring heavy rains, up to 6 or more inches per hour. In addition, there’s the threat of storm surge. Hurricane Katrina’s storm surge was measured at 27.8 feet and Hurricane Ike, which struck Galveston, ad a storm surge between 19 and 22 feet depending on where the measurements were taken.
Homeowners whose homes are long other bodies of water such as rivers, lakes, stream, and creek beds should also consider flood insurance. Over the past year or two, residents of San Antonio have had to deal with moderate to sever flooding caused by the Guadalupe and Comal rivers. These two rivers crested 25 feet or more causing widespread damage in the New Braunfels area over the past 2 years.
If your home is located downhill or below a dam, I recommend evaluating flood insurance. The Dallas Morning News ran a series of articles in December and January on the Lake Lewisville Dam. It’s seen a number of issues such as pockets of water bubbling beneath the dam (a possible sign of leaking), erosion, and seepage. If the dam failed, a wall of water 65 feet tall would sweep downriver inundating Coppell, Irving, and downtown Dallas which would be submerged under 50 feet of flood water. The recent flooding in Houston was directly related to the Army Corps of Engineers releasing water to prevent too much stress on area dams.
Another group which should consider flood insurance is anyone whose lot slopes toward their home. I’ve seen several instances over the past year where Dallas residents have received so much water in a short period of time, their French drains couldn’t keep up with it and water entered the home. Home insurance doesn’t cover damage from this but flood insurance does.
What do you think? Share your questions, comments,, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!