At the quarterly meeting of the Lincoln County Board of Realtors, we had the chance to listen to a great presentation by Christine Shirley about the National Flood Insurance Program (NFIP.)
Flooding concerns are a very timely subject, taking into account the hurricanes and general uptick in extreme weather. In fact, “flooding is the most prevalent and costly natural hazard in Oregon, and a component in 90% of the nation’s disasters.”
For someone considering buying a property in a flood zone, it’s incredibly important note that in order to finance the purchase with a loan, flood insurance will be required. There are quite a few factors that can influence the price of that insurance. It’s pretty safe to say that over time the price of flood insurance will continue to rise.
One huge takeaway from the presentation is that flood insurance is always transferable from the current owner to the new one. In cases of grandfathered zones and subsidized policies, this can make a huge difference in price.
Another good point is that you only need flood insurance to cover the value of the buildings being insured (not including the value of the land.) Shirley mentioned that many properties are over-insured because they are based on the price of the mortgage.
If your property is not in an official flood zone, but you have reason to worry about a flood, you can still obtain a “preferred risk” policy, which is often cheaper than the policies for flood zone properties.
Obtaining an elevation certificate is critical for figuring out how much flood insurance will be for a given property. These certificates are not maintained by any outside organizations, so the homeowner needs to make sure to retain them.
For more information about FEMA flood zones, check out https://msc.fema.gov
If you are considering purchasing or selling a property in a flood zone, I’d love to talk to you about all the aspects you should consider!