The Flood Insurance Guru Blog
Forest Fires have always been an issue in areas like California, Colorado, Nevada, Utah, and Arizona. In 2018 Camp Fire truly showed us how fast a fire can spread, what kind of damage it can cause, and other hazards it can create. One of these new hazards it can create is higher risk flood zones.
Forest fires can cause massive damage as we have seen in recent years with the Camp Fire in California and the fire in Gatlinburg Tennessee area. When these fires spread they burn everything in their path and take lives in many situations. As these fires burn they destroy trees and generally any vegetation there in its path. As this vegetation burns it removes community protection from floods. So what happens next?
Well as most people know FEMA also known as the Federal Emergency Management Agency does flood studies on areas to review maps and adjust maps accordingly. However as Houston Texas showed us many times these new maps can take years to get approved. The reason is FEMA recommends certain changes and local communities have time to dispute any changes. Many times extending the new maps for your years. As you can imagine when an area burns that has been traditionally in a low risk flood zone new studies can take time.
FEMA works as hard as it can to get new areas and existing areas mapped as quickly as possible. As they have shown us they are limited with their resources. So when they review these map studies they look at historical data in an area when it comes to flooding. However areas like Knoxville Tennessee, Salt Lake City Utah, Boulder Colorado, and Denver Colorado may have not had a lot of flooding issues historically. However changes in vegetation now take away any protection they have had in place.
So what happens is many of these areas should be in high risk flood zones also known as 100 year flood zones. However they are not because of no history of flooding but they have had a major risk in exposure. So then what are the options for property owners?
Well at The Flood Insurance Guru we always recommend flood insurance for every property owner but lets talk about when flood insurance would actually kick in. According to FEMA a flood happens when 2 acres are inundated by water or more than one property is inundated with water. It is also considered a flood if a mudflow is involved. Now that we know what flood covers lets talk about some additional risk that are created by forest fires.
As we have mentioned before when these fires spread they burn all vegetation taking away all protection. So when this happens it takes a lot less rainfall or water runoff to create a mudflow. Before the vegetation would be there to soak up a lot of the water but with trees gone, brush gone, and nothing between the water and structures it’s a ticking time bomb.
So when this does happen and it will happen as history has shown us. What are property owners options for flood insurance? Well there are basically two options flood insurance through FEMA or private flood. Before we talk about the differences lets discuss flood zones a little bit first. Before the forest fires most of these areas were in low risk flood zones, also known as flood zone x. These are areas of minimal risk where FEMA has not determined the probability of flooding. Its important to understand that about 30% of flooding occurs in these zones and is usually a result of flash flooding. As you can imagine without vegetation the probability for flash flooding is much higher. Now that we have an understanding of what flood zone x is lets talk about the different options.
The first option is the National Flood Insurance Program also known as NFIP which falls under FEMA. This is federal flood insurance program where rates are set based on numerous factors like the elevation of properties, age of the property, and foundation type. You can get a flood insurance quote through any local insurance agent where rates should be the same but many times they are not because agent knowledge on flood insurance varies so much. In many situations they will require an elevation certificate. What is an elevation certificate? This certificate shows the different elevations of a property compared to the base flood elevation which determines your flood insurance rates with NFIP. Its important to understand that in order to be able to get a flood policy through NFIP your community has to be a participating member in the program. You can check with your local community to see if they participate generally about 95% of communities do because of federal funding. Now that we understand what the government has to offer lets talk about the private market.
Private market flood insurance is flood insurance that is offered by private insurance companies. These companies are generally backed by two major players either Lexington or Lloyds of London which is a group of companies that provide funding. The private market sets its own rates but still pays claims based on what FEMA defines as a flood. Private market also provides some different coverages like replacement cost on contents and additional living expenses.
Understanding these two flood insurance options is very important. Many people are told if they are not in a high risk flood zone that flood insurance is not available and this simply is not true. Its also important to understand just because it may not be required does not mean you are not at risk of flooding. If you have questions about how you could be exposed to flooding, maybe you think you are in the wrong flood zone, or you feel your policy is overated please reach out to The Flood Insurance Guru.