Flood insurance premium concern

12 Replies

I found a property that cash flows nicely but there is a $3000/yr flood insurance premium. The area is under-market value for the area and is developing. I just wanted to get some feed back from people who may have been in a similar situation. 

It is high even as flood insurance premiums go. However, it is only 0.2 miles from the Chesapeake Bay. I might get a surveyor to come reevaluate the land since it does sit higher than the surrounding properties. It still cash flows even with the flood insurance premium and having an owner occupant loan. 

Thanks @Eugene M. for the plug. Sounds like you're in a high risk area for a flood. You can pull FEMA flood maps. There are a lot of factors that go into the cost of flood insurance... even how much the house is elevated off the ground can save hundreds. It also depends on the 200/100/etc year flood maps and chance of annual flooding. I imagine since your property is directly on the water it has a higher probability.

Definitely get a few quotes because there is probably some wiggle room in that $3000.

Ben's suggestion of checking the private market alternatives for the Flood Insurance is a wise one. There are multiple markets and their rates differ on properties. So check with the agents you contact to see which they are quoting.

Have a surveyor give you an elevation certificate.  It will state the elevation of your home and if it's over the BFE your rate will drop like a rock.  My home is in an AE zone but the bottom of my home is 1.4" over BFE so I pay about $4k less a year than a neighbor down the road that has a house a couple feet lower than BFE.