Better watch out and bring out your umbrella with you if you're in Alabama. This may get rough soon!

Alabama is expected to receive rain starting Thursday, February 3rd, and until Friday, February 4th. This is pretty normal if you'd think about it however there are some flooding concerns that may be seen during this time.

Alabama Faces a Potential Flood Event in 2022

In today's blog, we want to talk about this weather event in Alabama and the flood concerns arising from it.

Heavy Rain Brings Higher Waters

Alabama is up in arms as weather forecasts expect heavy rainfall to drop on the state. This heavy rainfall is expected to be averaging 2 to 4 inches of rain and will persist from Thursday to Friday as reported by the National Weather Service (NWS). Flood watches are being sent out already since we are already expecting 3 to 6 inches of heavy rain getting dumped on Alabama just for the night of February 3rd. This means that flash flooding has an up to 10% chance of happening across the state.

This event is also expected to have some major storms as seen by the National Oceanic and Atmospheric Administration (NOAA) which places the south and south-central parts of the state at a marginal risk for severe weather this Thursday.

Alabama Faces a Potential Flood Event in 2022Photo courtesy of NOAA

This puts cities Mobile, Montgomery, Greenville, and Tuscaloosa at a high chance of facing an isolated major storm in the next two days. These types of storms usually create the biggest concerns are damaging wind gusts, which could take down trees and knock out power, and tornadoes.

After Friday (February 4th), the rain will begin to move out however it doesn't really mean that everything ends there since there are chances of additional rain happening during the weekends because the cold air will be rushing behind.

Flood Concerns

One of the biggest concerns that we should be aware of is that this type of weather event will surely create big flood threats and increase the overall flood risk for the whole state in the next two days.

This ranges from what we call a pluvial flood, where collected water has nowhere else to go so it starts to pile up and inundate the area. This isn't really impossible considering that we still haven't moved out of the winter season. During this time, we expect the ground to be oversaturated which generally means that it won't be able to take in as much water as it should.

Another reason why flooding may occur from a life-threatening storm surge as water levels rise due to the precipitation. This is most likely to happen in coastal Alabama like Mobile City. Generally, this means that we might see a cocktail of floods as all three types may occur during this weather event: pluvial, fluvial, and coastal flooding.

Alabama Faces a Potential Flood Event in 2022

Fluvial flooding is only different from pluvial because the source of the floods comes from a water source like a river, lake, pond, creek, and such. Generally, this type of flood has a very strong flow to it and most of the time can easily damage properties along its path.

Other than these flood concerns, when that rain starts to happen, it's most likely that roads and bridges are going to be slippier than ever. This is why we always remind people to not drive into standing water or flood, or even during a rain event like this if it's not really necessary. We don't want to be dark and grim, but most of the casualties and injuries that happen in times like this are located and involve roads.

Why Flood Insurance is Important

When it comes to floods, most people would say that they wouldn't want to leave their properties unattended because something might happen to them. This same thinking causes a lot of trouble for these property owners when water starts to inundate the property.

Flood insurance can really help you cover for this flood damage and flood loss that may occur during a time like this. More importantly, you get peace of mind that you will still have a home to go back to even after a flood.

You have two options when it comes to flood insurance in Alabama: the federal-backed National Flood Insurance Program (NFIP) and its new Risk Rating 2.0, and Private Flood Insurance. Let's talk about these two.

NFIP

The federal flood insurance is gearing towards a fingerprint of flood risk for properties that get a policy from them since rates will be based on the individual flood risk. Although this makes it more affordable for flood insurance coming from FEMA, this may still bring an increase to rates for some property owners.

This type of change makes them a big contender to take the spot when you ask people where best to get flood insurance however it's integral to point out that other than how you're going to be rated, some things never change with the National Flood Insurance Program (NFIP) flood insurance.

When it comes to coverage, we're still talking about the same $250,000 maximum on dwelling or building coverage and $100,000 maximum when it comes to contents

Other than these, these are all that the federal government can offer when it comes to flood insurance even with the Risk Rating 2.0 update. Here's a quick breakdown of the NFIP 2.0 card compared to the current version we have at the time of writing:

Alabama Faces a Potential Flood Event in 2022

Private Flood

Private flood insurance has made a big push in the last 15 years. There have been a lot of changes in the last 5 years that allow private flood insurance to be a great flood insurance option for many property owners. Let's look at exactly what private flood insurance is.

For many years the only option for many property owners was the National Flood Insurance Program (NFIP). There were many limitations with this program like wait periods, coverage amounts, and cost of the policy.

It's important to understand not all private flood insurance options are the same. There are admitted and non-admitted carriers in the private market. Each one of these types of policies has different requirements they follow.

The private flood insurance market still offers flood coverage that doesn't really have any maximum amount. You can definitely still get more than $250,000. Even when it comes to personal items or contents coverage, you can definitely go more than $100,000 for flood damage. That coverage also comes with the loss of useadditional living expenses, and/or replacement costs.

We've also seen a lot of homeowners coming to us for flood insurance and were able to get it in just a few days. The maximum waiting period for a flood policy from a private insurance company is only 14 days.

Alabama Faces a Potential Flood Event in 2022

What This Means for the Future

Considering that both Risk Rating 2.0 and private flood insurance companies base flood insurance rates on flood risks, this type of weather event can really add up to the things that increase your risk of flooding. This can also be a hard-hitter when it comes to flood mitigation since more risks require more efforts to lessen the flood damage on your property.

If Alabama were to get dumped by heavy rainfall more frequently, this could mean that flood insurance rates will also skyrocket in most areas especially when such rain event causes huge flooding in the area.

We're starting the Month of Arts and Hearts with such a concerning scenario, so we hope that you stay safe during this time. If you really don't need to head out, please stay at home and follow your local government's guidelines on what to do when flooding starts to happen. The thing is flooding can happen anytime.

So if you've got questions on flood insurance in Alabama, what this rain event could mean for your flood risk score, or anything related to flood insurance, click below to access our Flood Learning Center.

Flood Insurance Guru | Service | Knowledge Base

If you want to speak to us about your flood concerns, click below to contact us:

The Flood Insurance Guru | 2054514294

Remember, we have an educational background on flood mitigation which lets us help you understand flood risks, flood insurance, and protecting your property long-term.

Business is booming as some would say to the real estate market in Alabama. Despite being in a pandemic, somehow real estate was able to keep up with the times. 2021 was one of these proofs as Alabama had an increase of 3.9% year-over-year (Y/Y) in real estate sales during the month of August.

Alabama Real Estate: Buying Properties in a Flood Zone

It's no secret that some of these listings sit on a high-risk flood zone, so today, we want to talk about things every realtor needs to know when it comes to buying and selling a property that's in a flood zone.

This is part one of a two-parter blog and for this article, we want to focus on the buyer's side of real estate.

Loan Types & Flood Insurance Options

When it comes to closing a house, most buyers don't really have the luxury to pay it all in cash. This is why loans exist to help ease up the expenses in maintaining a roof above your head. If you're reading this blog, you're most likely to be familiar with mortgages and how it works.

What you might not know is that mortgages and loan types can actually impact your flood insurance too.

You see, depending on the type of loan you have for your property, you'll get different options when it comes to flood insurance. We have different types of loans and we actually covered this topic on our podcast blog, but to further understand the situation especially after the Risk Rating 2.0 update with federal flood insurance let's give an example.

Alabama Real Estate: Buying Properties in a Flood Zone

If you have the Federal Housing Administration or FHA loan, you won't be able to get flood insurance through any private insurance carrier because your bank won't accept it. This only means that your only flood insurance source will be from the federal side which is through the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

There was a time that if you have a loan that's under the government such as an FHA loan, Veteran Affairs (VA) loan, or United States Urban Development Administration (USDA) loan, the only option you have is through the NFIP when it comes to flood insurance.

This meant those people with conventional loans are the only ones who can get flood insurance through private companies before. This was changed way back and only homeowners with an FHA loan are required to get flood insurance through FEMA and the NFIP.

So this is important to keep in mind. Consider first what loan type you have in order to get a proper expectation on where you can get flood insurance from.

Flood Insurance Claims

Another thing you want to consider when buying a property is its history of flooding and flood claims history. This way you get to have an immediate idea of the flood risks or flood hazards that the house might face.

It's also important to note that when it comes to flood insurance, you might not get a policy from the private insurance companies once they detect that the previous owner or the property is prone to flooding.

It's important to keep in mind that flood claims aren't like medical insurance claims where it goes wherever you go. What we mean by this is that when you file a flood claim on the property, regardless of who the owner is, the claims will stay with the property basically for its entire life.

Alabama Real Estate: Buying Properties in a Flood Zone

When it comes to the federal side, however, there won't be a refusal to provide flood insurance to properties like this however with the Risk Rating 2.0, having multiple claims on a property is sure to impact the overall costs of your flood insurance premiums with that house. This is what's called the claim variable.

For this one, it's crucial to always know the flood and claims history of the property. This way you protect yourself from unwanted non-renewals as per the carrier's discretion or expensive flood insurance rates.

Flood Insurance Premiums

One of the biggest questions asked by a potential buyer of a house concerns flood insurance rates. This opens the door for asking, "will my premiums skyrocket after I buy the property?"

Alabama Real Estate: Buying Properties in a Flood Zone

The thing about flood insurance premiums is that the rate is generally guaranteed only for 12 months. This means that after that, you may see some changes like a minor increase or decrease. This is considering that you weren't flooded. On the other hand, if the property was recently subjected to flood damage and there was a claim filed for it, the flood insurance premium can increase substantially.

Verifying the Flood Zone

One of the most important things a buyer or realtor should know about a property when it comes to flood insurance is its flood zone. Despite being removed from the rating consideration in FEMA and the NFIP, the private flood insurance market still look at this factor when it comes to rates. This means that flood zones directly impact your rates and risk of flooding.

Additionally, regardless of it being removed from the rating system, flood zones still have absolute control on whether or not the property is required to have a flood insurance policy with that property. Keep in mind that if you fall in flood zone A or AE, also known as high-risk flood zones or special flood hazard areas (SFHA), you're going to be required to carry flood insurance.

There are many cases where an incorrect flood zone is put in a policy — maybe because there was a recent flood insurance rate map or flood map update that wasn't known by the seller or confusion between different flood zones.

As a realtor, it's important that you are aware of this as well, if not an expert when it comes to it. A lot of potential buyers get frustrated when they get surprised about this requirement, so as a realtor it's best you let them know ahead of time.

When it comes to selling properties, you really want to help your buyer consider what the flood risk is and the chance of flooding. Some states like Texas actually require realtors and sellers to fully disclose the flood history and claims on a property, but regardless it wouldn't really hurt being transparent about these things. After all, we're talking about the safety of someone moving into a residential property.

If you've got any questions on a flood policy, the flood zone status of the property you're looking to buy, how the floodplain impacts flood zones, or anything related to floods, click below to go to our Flood Learning Center where we try to answer these questions.

Flood Insurance Guru | Service | Knowledge Base

You can also call us if you need a second opinion from a flood insurance agent when it comes to your purchase of a property by clicking below.

The Flood Insurance Guru | 2054514294

Remember, we have an educational background in flood mitigation which lets us help you understand your flood risks, flood insurance, real estate selling and buying, and mitigating your property's value long-term.

The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to Alabama and how they can impact your flood insurance in the future.

The Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

Alabama has been facing a lot of threats when it comes to flood damage and this is something that even homes that aren't in a high-risk flood zone are being impacted severely by floods. This is why it's always important to make sure that you have the best flood coverage with your insurance policy in relation to the premiums that you're paying for.

Here in Flood Insurance Guru, we always believe that the true risk of floods lies in the amount of protection that your insured property has against these impacts of flood waters.

NFIP Risk Rating 2.0

This new program that FEMA is planning to enforce with the National Flood Insurance Program (NFIP) in order to make sure that individuals will no longer pay more than their fair share of flood premiums based on the value of their homes. Most likely, these new risk ratings are going to be in full effect by October this year. Today, we want to discuss the premium rate changes coming to Alabama in order to better prepare ourselves for the upcoming changes.

Generally, this also means that your average flood insurance rates will depend on your property value. It's important to keep in mind that expensive properties may face higher premiums as a result of these rate changes.

Now, when it comes to the Risk Rating 2.0 or NFIP 2.0, you're going to see these ranges that are called green, blue, pink, and grey portions. Each bar represents the good, the bad, and the ugly changes when it comes to premium rates with the NFIP in Alabama. Let's break each one of them down to further get an insight into how these changes can impact you.

The Flood Insurance Guru | Flood Map Updates | Julesburg, Sedgwick County, ColoradoThe Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

The Good

When it comes to the green bar or the green range, this is generally the good change that you can see since this means that there'll be a decrease of more than $100 on flood insurance premiums. Now, this change will be an immediate change once the Risk Rating 2.0 kicks in on October 1st. This is good news for the 11,220 or 21% of policyholders in Alabama since this means you get to save on your premiums starting this October.

The Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

The Bad

Now, let's talk about the bad change which you'll see in that blue range. We're talking about the 36,736 Alabama policyholders or 70% that will experience this change. This is a bad change because we're looking at an increase of up to $10 per month for that 70% of the policyholders in Alabama when it comes to the flood insurance premium you're going to pay. This amount eventually totals to about $120 per year when this change kicks in October.

Now, this may not sound big when it comes to some people however you have to consider that the federal flood insurance or FEMA National Flood Insurance Program (NFIP) continuously updates flood maps, and properties that are sitting on those high-risk flood zones can find this increase very hard to swallow.

The Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

The Ugly

These ugly changes are what you'll see in the pink and grey bars in that Risk Rating 2.0. Now, we call this ugly because 6% in that pink range which is about 2,991 policies in Alabama, is going to get about a $10 to $20 increase per month. This totals from $120 to $240 per year.

You also want to include in this ugly change the 3% or about 1,706 policies who will experience a rate increase of more than $20 per month which can go way over $240 per year.

This can really be very ugly for property owners who are facing expensive premiums. We mentioned that the premium itself would be different on each individual properties in Alabama; this includes flood map data, flood claims and flood damage history, risk of flooding on your personal property, where the property is sitting when it comes compared base flood elevation levels in that area, and a lot of things.

This type of rate increase might be another reason to move into the private flood insurance market to find a much suitable cost of flood insurance. 

You can see the full graph of these changes below:

When Will It Happen?

Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date. 

On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.

So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change. 

If you have questions on these upcoming changes, what are your flood insurance options in Alabama, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.

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