I wonder if you buy a separate flood insurace for your rental properties. I have rental properties in Tampa, Atlanta and Las Vegas. I do not worry about Las Vegas, but flood is a threat to my houses in Atlanta and Tampa.
My property insurance excludes any damages caused by flood, which I think is typical.
So, do you guys buy separate flood insurance for your rentals? If so, how much you pay and any recommendation for insurance company?
I buy flood insurance if the lender requires it. Most of my properties are located in a federal flood plain, so they do require it. It's not cheap ($900 a year, or so) and you have to buy a separate policy for each house.
All flood insurance is backed by the NFIP, the carriers just service the policies. The rates are all the same based on the floodzone and elevation. Buy it from the same agent that provides the landlord insurance. It is inexpensive if you are not in a flood zone. 30%+ of all flood claims are from water/sewer back ups that are generally not covered on landlord policies.
Not sure what the laws are like in the states of concern to you but as someone from the NY metro area, get the flood insurance. I have never seen so much damage due to flooding in my life. One coworker of mine told me they had it for years and years and it was a complete waste of money and luckily they had it for this one.
I wonder how many landlords have flood insurance for their rentals. $900 a year for each house is not cheap at all.
Well I doubt landlords would have those policies unless their properties were near or in flood zones. I think going forward flood zones should be edited based on the frequency and impact of these mega storms have had in recent years.
I don't have it because all of my houses are in Zone X (low to moderate). I'm taking a bit of a risk, I know. The problem would be if a tropical storm stalled over this area and created rising waters.
This is fema flood zone map,
All flood Insurance is Federal.
My properties are all south of New Orleans (yes there is something south of New Orleans other then swamp.) One property is in flood zone X and I pay about $200 dollars a year. The others are in AE and I pay about 1200 a year each.
One of my rentals is in South Tampa but not a mandatory flood zone. Although we haven't had a direct hit from a hurricane since I've been here, we've had some pretty bad storms. I had flood insurance on this rental for a couple of years but cancelled it...yes it's a risk, but so is investing :)
If you are in a flood zone, check to see if the required flood policy will work with your numbers before you close on the property. Otherwise, we don't get it.
We do tile and same paint in all of our properties so if there is water damage, we could use what we would have paid toward the elective flood premium toward sheet rock, carpet and paint which are all inexpensive.
If you set aside repair/maintenance fund from your cash flow (which you should anyways), that will help offset the costs as well. It really depends on your risk tolerance and whether it makes sense for your area.
Updated over 4 years ago
Update: Just want to be clear that if the required policy doesn't work for the deal, don't get the property. Also, keep in mind that if the policy is too expensive, it maybe hard to sell to owner occupants down the line. If the policy is not required,
I only pay for flood insurance on the one rental I have in a flood zone (AE) as it is required for the mortgage. The one corner of the structure actually located in the flood zone is a 7' high crawlspace, not used for anything, (although tenants store lawn chairs in there over the winter). The new Biggert-Waters Flood Reform Act is already causing problems in certain areas -- hopefully not mine -- but I have already stopped looking in one of my favorite neighborhoods for my next purchase as it will definitely be affected, and I do not want any risk of huge increases in flood insurance premiums.
I do or homes even not in flood zone area but all my homes are south houston. So chance of tropical storm or flood is very possible.so to me paying for the policy is well worth it. Even if not required
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