Spring isn't stopping anytime and we're fast approaching the hurricane season. It seems that there are some states which are first to know this the hard way and one of them have been subject to multiple flooding just this year, Birmingham Alabama. Alabama in general seems to be receiving a lot of flooding even before we got into the Spring season.
We want to unpack what happened that caused these floodings in Central Alabama, understand how areas are impacted, their impacts on flood insurance, and availability of the flood insurance options.
Spring Storms in May
Yesterday, May 4th, Birmingham and most of Central Alabama faced severe storms and torrential rain. This immediately prompted the National Weather System (NWS) to issue a flash flood emergency for the metro area at the rush hours. The storms dumped up to 7 inches of rain within this time and a lot of areas faced not just warnings for flash flooding, but actual flash floods with strong currents.
One of the impacted areas was Jefferson County's Homewood city. The flood rose to 3-feet across the cities to the point that boats were needed to evacuate residents and emergency respondents to get to places. Birmingham also saw these strong floods to the point that major highways like Hoover city were engulfed by floodwater. We've also seen trees falling due to the severity of the flood everywhere in Jefferson and Chilton County, and there was slight flooding in downtown Birmingham. Shelby County schools also faced the backlash as schools had to be moved back to virtual due to the damages that the establishments received due to flooding.
Power outages were also a big thing due to these storms and 10,000 of the 97,000 power outage reports statewide were from Birmingham. The overall damages are yet to be determined and this is expected especially since we've seen bridges and highways flooded, creeks overflowing, and numerous building damages. Many locals mention that this might be the worst flood they've seen, so we want to dive into the details of why this flooding was drastically worse and volatile.
Spring flooding has been a common occurrence across the country and this isn't different when it comes to what happened with Birmingham. Flooding generally has a natural way of flowing out of the area; it may runoff to nearby bodies of water like rivers and most commonly drained by the soil naturally. However, this wasn't the case due to the number of torrential rains that came in.
Now, in other areas where snow is a common occurrence in the Winter season, the spring thaw is the catalyst for these spring floods. Spring thaw is when the snow and ice collected during Winter start to melt and seep into the ground, saturating it, and some would flow into other areas known as a spring runoff.
Although the same can't be said for Alabama, there's still an important detail there: water seeping into the soil. When it comes to this recent flood, data shows that soil was oversaturated due to recent rains and the constant rain in a short period of time. This in turn didn't really give any leeway for the flood to be properly reduced both by natural means and by storm drainage systems.
These storms and torrential rains are to be expected and prepared for since we're moving into a warmer season. This generally means that rain will be more often due to warm fronts that eventually become rain when they clash with cold air.
This begs the question, what can you do if you're impacted by flooding in Birmingham?
Alabama Flood Insurance
I was able to speak with clients across the state and many of them say that they don't have flood insurance which almost gave me a heart attack. The reasoning behind this decision is because their insurance agent is telling them that they don't need one. If your agent told you that you don't need flood insurance because you're not in a flood zone, find yourself a new one because there's no such thing as "not in a flood zone". Eventually, when these property owners get flooded, they lose everything.
To clarify, FEMA maps every area to a certain flood zone, it just varies on the level of risks your facing: are you in a low-risk area or a high-risk area when it comes to flood? To get things straight, low-risk areas like Flood Zone X aren't required to have flood insurance, but it doesn't mean you don't need it. This is why I always say any insurance is better than no insurance at all.
Don't File that Claim
The first thing that comes to mind when a flood happens — if you're a policyholder — is to file a flood claim so that you can get back whatever was lost due to flood damage. However, we highly discourage this if the damages aren't really more than $10,000. This may sound unorthodox since the best thing to do is file an insurance claim regardless of home insurance, auto insurance, or any type of insurance.
The thing is flood claims stay with the property forever. So filing a claim even for damages less than $10,000 won't really eliminate the effects of flood claims to a property. One of the most common consequences of repeatedly filing a claim for flood damages is that the property's going to be on the severe repetitive loss list. A severe repetitive loss property is those that filed claims more than once in the last ten years and this impacts flood insurance drastically.
Flood claims directly increase the cost of premiums per claim, so if you do multiple claims in a short time, you're only saying that your property is very flood-prone so your premiums can go up drastically. We've seen this happen where a client had to pay an average flood insurance premium of about $10,000. Getting into a severe repetitive loss also hurts the resell value of your property and this can prevent you to be able to sell the property since it has a very expensive premium and recorded to be very flood-prone.
Flood Insurance Options
Now, it's important to mention that frequent flooding in an area may affect the flood insurance options. Birmingham residents can get flood insurance through the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) or the private market.
When it comes to availability, it's important to note that there might be some areas that the private insurance companies may pull away from since generally, they don't want to take those risks. This leaves you to go through FEMA exclusively, but let's talk about the difference between these two.
FEMA and the National Flood Insurance Program (NFIP) don't really get to pick and choose whom they're going to provide their insurance to or what risks they're going to take. This is an important difference between what we mentioned on private flood insurance and federal flood insurance.
The NFIP provides a max amount of $250,000 when it comes to residential property damage and up to $500,000 in commercial property damage. Regardless of the policy type, residential or commercial, there will be coverage on contents or personal items that maxes out to $100,000. The NFIP also doesn't provide additional living expenses, loss of use, and replacement costs with their policies. The only time additional living expenses coverage may be provided is if there's a presidential declaration on the flooded areas.
When you purchase federal flood insurance, you may also have to make sure that you adjust your plans since there will be a 30-day waiting period before the policy takes effect on your property. If you're planning to go through FEMA for your flood insurance, do it as soon as possible to make sure that you get covered before another flooding happens within the next thirty days.
The Private Flood
We've already covered some concerns with the availability of flood insurance in Birmingham or the lack thereof, but since there are numerous private insurance companies providing flood policies in Alabama and Birmingham, there's still a big chance that you can purchase flood insurance in the private market.
Private flood insurance policies don't have any coverage limits, so the cost of coverage they can and will provide won't be maxing out at a specific amount. This is why we recommend people with expensive properties to go through the private market since it's certain that the coverage on the property will cover everything.
Coverage in private flood policies can go up to $10,000,000 on properties, structures, and buildings. You may also have the flood policy written for multiple structures in your property in a single policy, something that FEMA and the NFIP will have you carry separate flood insurance for. This is with up to $1,000,000 in personal items coverage and includes additional living expenses, loss of use, and replacement costs.
If you're looking to get flood insurance within the next week or so, we encourage you to opt-in the private market since they can have the policy take effect on the listed properties within fifteen days.
If you have any questions on how these recent flooding can impact you, your flood insurance options, flood risks, or anything about flood, reach out to us. Remember, we have an educational background in flood mitigation and we want to share this to protect the value of your property long term. You too can be prepared through flood education and awareness. Click the links below to know more and get started: