Flood Insurance

[dumpster56]

Does anyone who lives in a low to moderate risk for a flood have flood insurance? I am now renewing my homeowners policy and every year I do the do I need 30K of flood insurance. I have water behind the house but its a small pond that drains into a larger pond that has a dam that if 2 feet of water goes in it would spill over and run down a 20 foot hill. My home is 15 feet above grade so water into the house should never happen. I just wonder if water might get close enough to the foundation if we had say 20 inches of rain. Live down south but 150 miles inland. Hurricanes and tropical systems can dump water on us.

 

[Walt34]

We don't have flood insurance, although there is a creek behind the house perhaps 100 feet below. There is a flood plain on the other side of the creek that floods at least twice a year. But we're up high enough that half the neighborhood would have their rooftops under water by the time we got a wet basement.

DW worried about it for a while but got over it after a hurricane and no issues. There is a web site, I forget the name, that allows you to "drill down" and find your exact address and the 100-year flood risk. Ours is about zilch.

The name of the site will come to me about 2:43 AM and I'll post it then.

 

[W2R]

OK, I might be just a TEENY bit biased since I live in New Orleans. But I really can't imagine not having flood insurance in your situation!!!!!!

Flood insurance is really cheap because it is from the federal government (through your insurance company). Basically it is "on sale". You never think you'll need it until after you do (lots of people can vouch for that).

I'm thrifty, but not THAT thrifty.

 

[Rustic23]

We lived in Houston. Not is a Flood plain. We had flood insurance. It is cheap! Houston is flat and tropical rains can dump a lot of rain in a very short time. The storm sewers will not handle it and you will get flooding. Never needed it, but it was worth the piece of mind.

 

[Buckeye]

Let's say nothing happens for 10 years but in the 11th year something goes very wrong and you get flooded in a major way.

Ask yourself this question, "If I had the chance to do it all over, would I have purchased the flood insurance?"

If the answer is "yes," take the free do-over now and buy the flood insurance. Like most insurance, you hope you never have to collect but if you get flooded you are going to be very glad you bought the insurance.

I live in one of the towns in Ohio that had very bad flooding last August. Many people in relatively high risk locations had stopped purchasing flood insurance because there had been no flooding for many years. Many more people didn't purchase it because they were in areas with flood risk but it was relatively low based on past flooding and the flood maps. This year the town flooded into areas no one would have imagined. I was still a mile from the edge of the flood waters at the worst of it but I never sweated it while the rain was pouring down or the water was rising because we had purchased flood insurance. It was the best piece of mind $300 (low risk area) could buy.

I learned the "piece of mind" value of flood insurance during the hurricanes in FL in 2004. The wind was a problem but in many cases, the water was even more damaging. The torrential rains would come long before the strongest winds and it was nerve-wracking to watch the water collecting everywhere. Obviously, water was also a big problem during Katrina. When we moved to Ohio, there was no doubt we were buying flood insurance whether we "needed" it or not. You just never know.

 

[dm]

I have it, but I can see the Mississippi River. I'm seven feet above the 1993 level, ( the great Flood). But as other's have said, its cheap and I worry about my foundation.

 

[Orchidflower]

Lived in Bellaire, Texas, which is in the CENTER of Houston. Bizarre, but that's Houston.
Anyway, the last flood was 1963. Had to buy flood insurance as that was a city ordinance for all people who had houses there, and the mortgage company insisted on it.
My neighbor bought her house from an old time friend, so she could skip the flood insurance for the 14 years she lived there.
The moral of this tale: For the $250 it cost me for the 20+ years I lived there, we never had a flood....until 2001, when my house flooded, lost a new Camaro and part of my house.
And the neighbor? Oh, she lost her ENTIRE house. No flood insurance yet. Got 1-1/2' of water in there, couldn't get it repaired quickly as it construction workers were so busy during that time, and mold took over her house. The entire family dispersed, and the house was torn down. Lost alot of things. too, including 3 computers. Fun times.
My suggestion: Get the flood insurance! At least you will have peace of mind. Some things are just not smart to be cheap about, and this is one of them.

****Warning: Just DON'T get State Farm as they cheated so many in Texas out of their rightful monies (including me)!

 

[Ronstar]

Does anyone who lives in a low to moderate risk for a flood have flood insurance? I am now renewing my homeowners policy and every year I do the do I need 30K of flood insurance. I have water behind the house but its a small pond that drains into a larger pond that has a dam that if 2 feet of water goes in it would spill over and run down a 20 foot hill. My home is 15 feet above grade so water into the house should never happen. I just wonder if water might get close enough to the foundation if we had say 20 inches of rain. Live down south but 150 miles inland. Hurricanes and tropical systems can dump water on us.

Here in Illinois, an owner of land in a flood plain can get a survey and flood certification that specifies elevations of the flood plain and elevations of the house. If the house elevations are higher than the flood elevation, generally flood insurance is not needed. I recommend contacting a surveyor.

 

[TargaDave]

Yep. Sound side canal front home on pilings on the northern Outer Banks. Unfinished closed-in ground level with flood vents. Flood and wind-hail(hurricane) insurance pretty much a given. Only one serious flood in the history of the development (40 years). Most hurricanes pull the water out, not in, due to location and orientation

 

[dumpster56]

Here in Illinois, an owner of land in a flood plain can get a survey and flood certification that specifies elevations of the flood plain and elevations of the house. If the house elevations are higher than the flood elevation, generally flood insurance is not needed. I recommend contacting a surveyor.

I have a good survey, and they said that the entire town would have to be under 15 feet of water to get water in the house. I may still get 30K of flood just for the odd chance that the drainage area of the pond might make it to a corner of the foundation or the footings of my deck . If they were undermined it might cost some to fix. water in the house is not going to happen from the water in the back of the house we are up almost 20 feet. I too have been watching too much weather channel and think to myself what if 20 inches of rain dumped on this area from a tropical system. How high would the pond get before it went over the dam...

Ok now what about earthquake insurance. They was a big shake in the south carolina area what 200 years ago??

 

[W2R]

Here in Illinois, an owner of land in a flood plain can get a survey and flood certification that specifies elevations of the flood plain and elevations of the house. If the house elevations are higher than the flood elevation, generally flood insurance is not needed. I recommend contacting a surveyor.

Here in Louisiana the same is true. Plenty of homes flooded that were not in zones requiring flood insurance due to being above the flood plain. You probably saw them on TV in 2005.

In my opinion the individual home owner should use these surveys as PART of the information they need in making their decisions. If you live close to a body of water, in an area subject to tropical storms, I think those facts should also play into the decision to get or not get flood insurance.

Just my opinion, and as I said I might be a little biased due to my experiences. But for goodness sake, flood insurance is not going to break the bank.

 

[Texas Proud]

One of the problems with some of this thinking is 'buy it, it is cheap and if you need it you will be glad you had it'....


BUT, how many people buy travel insurance when they travel? That is the same 'reasoning'... and how many people buy extended warranties? Again, the same thinking...

And how many people have (as someone said) earthquake insurance.. or long term care insurance... etc. etc...

There are many risks that we take every day.... you have to determine the chance of something happening to you and how much it costs to mitigate that risk....

We had Allison here a few years back... flooded some places here in Houston that were never flooded before... a lot of downtown areas which were never under water....

They did a study on the flooding... and where I live we got a lot of rain (in the 17 inch range on the flood day)... and not a problem at all...

I am not even close to the 1% (100 year flood plain) or the .2% (500 year flood plain)....

Since there are many on this board who are taking a 5% to even a 10% chance of failure who still take the jump...

SOOO, to me... it is not worth the cost of $300 per year (I think it is more for me) for something that have even less than a .2% chance of happening

 

[Buckeye]

I never buy travel insurance or credit insurance or extended warranties nor am I purchasing LTC insurance or life insurance but I am buying flood insurance in a low risk area.

I think the reason I am getting my money's worth from buying flood insurance in a low risk area is that with floods you can watch the destruction approaching/forming over a relatively extended period of time. Earthquakes are instantaneous but the hours or days of torrential rain or the period of time the river is rising is agonizing. The helplessness and the fear of very major financial loss because I didn't have flood insurance are feelings I don't want to experience again.

So maybe I'm actually insuring against re-experiencing very traumatic emotions rather than the actual flood damage!

 

[W2R]

I never buy travel insurance or credit insurance or extended warranties nor am I purchasing LTC insurance or life insurance but I am buying flood insurance in a low risk area.

I think the reason I am getting my money's worth from buying flood insurance in a low risk area is that with floods you can watch the destruction approaching/forming over a relatively extended period of time. Earthquakes are instantaneous but the hours or days of torrential rain or the period of time the river is rising is agonizing. The helplessness and the fear of very major financial loss because I didn't have flood insurance are feelings I don't want to experience again.

So maybe I'm actually insuring against re-experiencing very traumatic emotions rather than the actual flood damage!

So true. Also, flood insurance is the only insurance that I can think of that is almost completely subsidized by the federal government so that helps in the feeling of getting one's money's worth. Even for a LBYM'er like me in the New Orleans soupbowl, at 2.6 feet below sea level, my flood insurance cost of $451 seems pretty trivial when weighed against the risk.

I think that when I move to Missouri, I will get flood insurance if I am very near a stream or lake, or if I am in a low lying place. I probably will not get it if I am on top of a hill overlooking everyone else, and with no lakes or streams nearby. I would always get it anywhere in South Louisiana south of I-10, where I have lived for the past 12 years.

 

[Bestwifeever]

I'm in a flood plain in Illinois (put in flood plain 10 years after we bought it), lender requires flood insurance to cover mortgage. Flood plain based on elevation--closest water is 3 miles away. House has stood here 120 years w/o a flood.

$1653 this year ($250,000 coverage, $5,000 deductible, covers building only, not contents).

Not cheap for me.

 

[Buckeye]

Bestwifeever - I get both max dwelling and max contents coverage for my $300 (actually $325) so I guess I am considered very low risk compared to you even though I am only 2.5 miles from the river that flooded our town (twice) last fall. Although it seems very flat here, we must be elevated from the flood area to have such a low risk. I know we are not considered to be in the flood plain.

 

[Rustic23]

If my $5,000 vacation is a bust, not even sure what credit insurance does, and I am self insured for long Term Care. I could not afford a $250,000 hickey to replace a flooded house. Having said that, we do not have flood insurance now. Live on a lake. The dam would have to overflow before we flooded. Our house sets on a steep grade with the water dumping directly into the lake. It would be like flooding on the side of a mountain.

However, if I lived in Houston, I did, and would have flood insurance.

 

[Ronstar]

Here's an argument for flood insurance. Most lenders use the FEMA flood insurance rate maps for basis of flood insurance on existing homes. Municipalities abide by the FEMA maps and regulations in setting minimum grades for proposed houses.

Generally lenders require flood insurance if the property falls within the limits of the 100-year flood plain. The determination is usually made by scaling the FEMA map to see if the property falls in the shaded flood plain area. In many cases the mapped flood zones are inaccurate because they are not based on ground elevations and a current flood plain model. Flood zones based on elevations are generally more accurate than those that are not, but many times the shaded limits per elevation on the map do not conform to where that elevation is in the real world.

Here is a link to the FEMA flood insurance rate map for part of New Orleans. The dark shaded areas are zone A1 with base flood elevations determined. Note that a significant portion of the map area lies in zone B - area between 100 year and 500 year floods. Lenders may not have required flood insurance in these zone B areas pre-Katrina, but it certainly would have been a good investment.

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[Bestwifeever]

We visited our daughter several times in Houston while she was in college and enjoyed some monstrous rains with (temporarily) flooded streets--I too would want flood insurance there. I can see the value in flood insurance almost anywhere, but in our case it is just irksome that it costs so much for us (three times our homeowners insurance, even with a higher deductible), and we were placed in a flood plain fairly recently. Also the value of our property is in the land, not the house--if the house were swept away I have a feeling Hartford would balk at coughing up $250,000.

 

[Buckeye]

Bestwifeever-Are you saying your lender is forcing you to flood insure for a value greater than the reconstruction cost of your dwelling?

 

[Bestwifeever]

Bestwifeever-Are you saying your lender is forcing you to flood insure for a value greater than the reconstruction cost of your dwelling?

The lender wants the max based on the amount of the mortgage, both dwelling and land. Can't get out of it.

At this point I just consider we've paid for a trailer in NO and are now helping subsidize the insurance for others....

 

[Buckeye]

Lenders used to make folks insure for at least the value of the loan but I believe that was declared illegal several years ago. I'll make the policy limit equal the loan amount for closing as it makes closing go smoother but right afterwards I adjust the policy limit to cover replacement value. At times the adjusted policy limits have been less than the loan and at times the adjusted loan limits have been greater than the loan.

The loan amount is irrelevant to having your home properly insured. My previous home in FL had a $198,000 loan and a dwelling replacement value of $230,000. I would have been under-insured if I had used the loan value to set my policy limits and hadn't had USAA perform an analysis of what proper coverage should be.

It may be illegal for the lender to require flood insurance at the max if that exceeds the dwelling replacement value. Are your homeowner's limits matched to your dwelling replacement cost or your loan value?

 

[Texas Proud]

After Allison came through and flooded Houston one of it's worst floods... they did a map on where it floods and where it does not... more recent than the FEMA maps...

I am not in the .2% floodplain... so to me it IS a waste to insure on something that has that small of a chance to happen... is that chance zero.. not at all... there is a chance that a huge meteor will hit the gulf and create a 100 foot wave and completely cover the whole area.... I don't think I will insure for that either...

For some reason, people think Houston is flat... well, it is kinda... but there are enough areas that are 'high' that they do not flood... never have in the records that have been kept... and our drainage is quite good... the system is designed to handle 2 inch an hour rain (at least in most places).... and the streets are designed to flood first.. and that is a LOT of water... USUALLY where it floods is along the path were water flows.. and can get backed up when there is a lot...

As for NO... well, if I were below sea level, I think I would have flood insurance no matter where I was located.... heck you were under water if there were not dikes and pumps.... that is just a flood waiting to happen...

And there are some major rivers here in Texas where you know there is a flood plain that people want to live on... and they continue to get flooded all the time... but it was clearly known...


I just looked at the maps... and pulled up my zip.... here it is... you can easily see where it floods....



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[Buckeye]

Bestwifeever - Here is language regarding what Fannie Mae requires for homeowners insurance. I'm assuming the same logic applies to flood insurance. Seems like most mortgages would be covered by these requirements but maybe yours isn't. It might be worth pushing the issue with your lender since you seem to be paying for additional coverage you could never collect on.

Industry Alert Homeowners Insurance Policy Limits

Fannie Mae Requirements


The Department received written confirmation that Fannie Mae does not require the homeowner's insurance policy amount to be equal to the loan amount. Fannie Mae's guidelines for determining the amount of hazard insurance coverage are set forth in the Fannie Mae Selling and Servicing Guides. For any first lien mortgage (excluding a reverse mortgage), required coverage should be equal to the lesser of:

1. 100% of the insurable value of the improvements, as established by the property insurer; or
2. the unpaid principal balance of the mortgage, as long as it equals the minimum amount (80% of the insurable value of the improvements) required to compensate for damage or loss on a replacement costs basis. If it does not, then the coverage that does provide the minimum required amount must be obtained.

Therefore, according to Fannie Mae, to determine the required amount of hazard insurance coverage for a loan delivered to Fannie Mae, Fannie Mae approved lenders are required to "compare the insurable value of the improvements, as established by the property insurer, to the unpaid principal balance of the loan. If the insurable value of the improvements is less than the unpaid principal balance, the insurable value will be the amount of the coverage required. If the unpaid principal balance of the mortgage is less than the insurable value of the improvements, the lender is required to calculate 80% of the insurable value of the improvements and compare the result to the unpaid principal balance. If the result of this calculation is equal to or less than the unpaid principal balance, then the unpaid principal balance will be the amount of the coverage required. If the result of this calculation is greater than the unpaid principal balance, the calculated figure will be the amount of coverage required."

 

[Orchidflower]

I'm listening to Want2retire. I figure an Oceanographer probably has a better clue about flooding than I ever will.