Rental Property Investor · Dallas, TX · Member since 2018 · 26 posts · 16 votes
I have multiple properties in a FEMA Rated "minimal flood risk" zone - but still in Virginia Beach, VA. VB experiences all the joys of a hurricane prone area as well as the weather irregularities of the southern east coast.
To insure these properties for flooding costs me almost $3,000 annually... I am asking the group why continue to shoulder this burden? How much weight does FEMA's rating carry in your mind?
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
7y
If you don't already have one for each property, you can also look into getting a flood elevation certificate. In a nutshell, FEMA bases the risk on the absolute lowest point for any particular zone/area. So, if you're property is higher than that, it can potentially be a big savings on the flood insurance. In fact, if any of your houses are raised even just a little bit, definitely get a flood elevation certificate.
My own personal home in the lovely, Katrina-hammered city of New Orleans was $1800/year when I bought the house in 2011. But it didn't have an elevation certificate and is raised about 2' off the ground. I got an elevation certificate (costs $250-$400 where I live) and my flood insurance dropped by almost 2/3rds. down to just a hair or so above $700/year.
Rental Property Investor · High Point, NC · Member since 2017 · 272 posts · 304 votes
7y
Minimal risk I believe means less than 0.2% chance of flooding in a year. That means that once every 500 years a hurricane has a chance of bringing in the tide high enough to flood the property. If I were you I would cancel the annual insurance and have enough saved in your emergency fund to take care of flooding in case you own the property when nature decides to flood that high. In about 3 years you would likely have saved enough in insurance costs to re-floor and re-drywall the lower portion of one small house.
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
7y
If you don't already have one for each property, you can also look into getting a flood elevation certificate. In a nutshell, FEMA bases the risk on the absolute lowest point for any particular zone/area. So, if you're property is higher than that, it can potentially be a big savings on the flood insurance. In fact, if any of your houses are raised even just a little bit, definitely get a flood elevation certificate.
My own personal home in the lovely, Katrina-hammered city of New Orleans was $1800/year when I bought the house in 2011. But it didn't have an elevation certificate and is raised about 2' off the ground. I got an elevation certificate (costs $250-$400 where I live) and my flood insurance dropped by almost 2/3rds. down to just a hair or so above $700/year.
Rental Property Investor · High Point, NC · Member since 2017 · 272 posts · 304 votes
7y
@Nico C. I insure all properties that are required by FEMA, here it is called flood zone AE, basically a 1% chance of flood per year, or floods once per 100 years according to FEMAs map. Also concur with the elevation certificate!
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
7y
Your elevation certificate will consider the lowest level including basement if you have one. There used to be some nuances regarding basements, I don't think that is true anymore. Not sure if you can up the deductible so they only kick in when its essential. Also check into how rentals are treated. There were some differences in how OO vs rentals were treated when we had a loss in NJ.
Specialist · Baltimore, MD · Member since 2017 · 418 posts · 126 votes
7y
@Nico C. I am an insurance broker licensed in VA (although MD based)
I recently had a client who came to me with higher flood insurance than his mortgage payment. After getting him and elevation certificate and a lot of back and forth with FEMA we got him a $2600 refund.
Investor · USA · Member since 2015 · 325 posts · 447 votes
7y
@Nico C.
I just renewed my flood insurance policy today! I originally went through FEMA and it was around 4K per year. I recently switched to Lloyd’s of London policy that was 2500/year.
I thought before this quote that you always had to go with FEMA but there are other lender approved options.
Rental Property Investor · Dallas, TX · Member since 2018 · 26 posts · 16 votes
7y
@Kai Van Leuven
Thanks for the insight!! This policy is not even mandated through my mortgage - I took it on as a precaution. How does that change things in your mind?
Investor · USA · Member since 2015 · 325 posts · 447 votes
7y
@Nico C.
If it was not required I would “self insure” with my property. There are super high levys that are not taken into account.
I would still try and get a quote if it is the same coverage for less. It may help you sleep better at night having it. If that is the case why not pay less?
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
7y
In addition I suggests speaking to a flood mitigation company. In Hampton Roads Mike Vernon is the well respected expert. Everyone I know who has used him has been thrilled with the ratio of the cost to mitigate vs the savings that resulted. BP won’t let us put phone numbers here, but if you google him he is easy to find. He teaches all the real estate agent CE classes on flood, sells flood insurance, and owns a flood mitigation company.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
7y
@Nico C. I think what you're saying is the total cost for all your VB property for flood insurance is $3000 per year and you're wondering if it's ok to not have it? I do not carry flood insurance on my Zone X property, and the issue I have with flood insurance for investment property where it's not required by lender is the $250 surcharge FEMA puts on each one, so even if it's only $300 to insure if it was owner-occupied, they charge me $550 for the same thing and offer less coverage. I have flood insurance on my home here in VB because they don't charge me the surcharge, but I do not have it on my rentals in Zone X as it would cost me over $1000 just in "surcharges" for those, and that just makes me angry. The NFIP says if more homes participated in the flood insurance program, it would be better for all, but then they charge landlords $250 per house just because they can do it politically to let owner-occupied people pay less. The net result, however, is less participation from people like me, who would happily pay normal rates to insure multiple properties, helping the program, but I don't participate because I refuse to pay a penalty "surcharge" just because I'm a landlord.
I own 5 properties in a flood zone and one of them I was able to get it lifted due to getting an elevation check from a surveyor which cost my $700 in NY, it is called a LOMA and you should be able to call a local surveyor and they can almost tell you if it would pass before paying. 4 of my properties will not pass so what we did is asked the insurance company to have the flood insurance only cover the cost of my bank loan and it lowered it drastically.
Rental Property Investor · Dallas, TX · Member since 2018 · 26 posts · 16 votes
7y
Here is a strange twist - updated elevation certificates will not lower my premiums per my agent. My insurance company also says the properties ARE in a flood zone, but my banks don't require flood insurance... seem odd? Appreciate all the wisdom here guys!!