If you live in Alabama, flooding might not be new to you however these flood events still surprise homeowners across the state. So you might be wondering, how can I fight these flood risks that I face especially in Birmingham, Alabama in Jefferson County, and Shelby County.

Birmingham, Alabama Flood: One Year Later

In this article, we take a look back at how this flood event of October 2021 impacted flood insurance in Birmingham, Alabama.

The Birmingham Flood of October 5th

On October 2nd and 7th of 2021, Central Alabama was met with off-and-on heavy rains and storms. This is when around 6-10 inches of rain was dumped on the area causing widespread flooding. The Birmingham area alone received at least 4 inches of rainfall with central Birmingham receiving more than 6 inches of rainfall. This immediately led to flash flooding in the area.

 

The flooding caused a total of 66 emergency calls between October 6th and 7th which lead to 16 water rescues from flooded properties and stranded vehicles. Sadly, this flood event also caused a total of 4 fatalities in Marshall and Shelby Counties.

In less than 3 days, Central Alabama was easily ravaged by this flood event. So how did this flooding impact flood insurance for Alabama?

Birmingham, Alabama Flood: One Year Later

The Impacts of the Flood of October 2021

For those who have active flood insurance policies, regardless of whether it's from the National Flood Insurance Program (NFIP) or private flood insurance companies, this flood event meant filing flood claims. You might be wondering, how will these insurance claims ripple into the present day.

NFIP Risk Rating 2.0

First, let's discuss what this could mean for policyholders of the National Flood Insurance Program (NFIP). When it comes to the NFIP especially considering that this flood event already was when Risk Rating 2.0 first went live. If you filed a flood claim and got payment from the NFIP due to this flood event, this could impact your flood insurance premium rates.

This is because Risk Rating 2.0 uses a claim variable wherein your previous flood claims will be forgiven. However, once you file a flood claim, the Federal Emergency Management Agency (FEMA) and the NFIP Risk Rating 2.0 will do a 20-year lookback. This means that you will be rated on how many claims you have made in the last 20 years and it gets included in the calculation of your flood insurance premium upon renewal.

Birmingham, Alabama Flood: One Year Later

Private Flood

On the other hand, a private flood might also present some unpleasant situations upon filing a flood insurance claim. Some flood insurance carriers might stop providing to your community or also known as moratoriums. Equally, if moratoriums won't happen in a specific community, policyholders might find it difficult to renew their flood insurance policy

This also means that if you get to renew your flood policy, you might see an increase in your flood insurance rates.

You may be asking, does paying off my mortgage lower the cost of flood insurance for me?

Birmingham, Alabama Flood: One Year Later

Mortgage & Flood Insurance

Sad to say, paying off your mortgage will not really impact the cost of flood insurance for you. This means that you won't see any decrease in flood insurance costs. Regardless if it's an annual or monthly mortgage payment, it won't really have any influence on your flood insurance rates.

This will, however, impact flood insurance requirements. Keep in mind that even if you're in a low-risk flood zone, your mortgage or lender may require you to buy a flood policy for the property. This is especially true for properties that sit in high-risk areas. High-risk flood areas include properties that are mapped into Flood Zone A, Flood Zone AE, or the Special Flood Hazard Area (SFHA).

This doesn't mean that you shouldn't buy flood insurance even if you're in a low-risk area or flood zone like Flood Zone X. Remember, 30% of flood insurance claims from these zones. 

If you want to know your flood insurance options, how to handle your flood insurance in Birmingham, or anything related to floods, click below to go to our Flood Learning Center where we try to answer these questions for you.

 

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2020 has been a year that no one will ever forget. There are three things we want to look at in 2020 and how they could impact the future of coastal private flood insurance.

  1. Covid
  2. Social Injustice
  3. Hurricanes

 

                                                           Covid

When Covid hit in March of 2020 it caused many businesses to come to a crashing halt.

The hospitality industry has basically been non existent and you couldn't pay someone to get on a cruise ship. Airlines are barely surviving. As this happened businesses turned to their insurance companies for coverage.

However many were surprised to find out that most insurance policies don 't cover this type of disaster. Government put pressure on insurance companies to provide coverage. However its difficult to provide insurance coverage when a premium was not charged for a risk.

As these businesses started to close they started to cancel their policies. This started to impact insurance companies as businesses were no longer needing insurance for a closed business. While this was a minimum impact on the bottom line when you add the next two things it creates a major problem.

 

                                 Social Injustice

2020 has seen the rise of social injustice and unrest across many parts of the country. Portland Oregon has seen many businesses burned and even Atlanta Georgia saw businesses damaged after a man was killed in an altercation with police. 2020 was problem the first time in 50 years that you have seen moratoriums put in place by insurance companies for selling business insurance.

At one point Target had to close its Minnesota stores because of looting.

 

                                                Hurricane Season

Now onto the third maybe the biggest thing to impact insurance companies in 2020. The 2020 hurricane season was predicted to be busy but no one predicted it to be this busy. In fact NOAA has had to make several adjustments to their hurricane predictions for 2020.

As we write this blog at the end of October in 2020 we have had 27 named storms, 11 hurricanes have made landfall in the U.S. and 5 hurricanes have made landfall in Louisiana.

This ties the record for most landfalls in a year within one state. Florida set the same record in 2005.

Hurricane Sally, Marco, and Delta have all created major damage in the gulf states. In fact Delta and Sally made landfall only 15 miles a part.

Like most people in 2020 insurance companies are eating through their reserves fairly quickly and they are discovering that many of their risk models were off.

So what does this mean for coastal states like Florida, Alabama, Mississippi, Louisiana, and Texas.

In Mississippi we are already seeing some private carriers halt business completely and we have seen this in Louisiana for a few years. Texas has also had this issue since Harvey.

We could see this pattern start to work its way towards Florida and Alabama.

Does this mean flood insurance will not be available?

No

The National Flood Insurance Program is available for properties where communities participate. It just means that the private flood insurance options could be limited for a while.

This will be a crucial time for you to work with an insurance agency that can defend your risk?

What does this mean?

This means being able to show how a risk may have changed because of mitigation efforts even if it has flooded. We see customers rejected everyday because someone did not defend their property correctly.

If you have questions about what your flood insurance are in these areas then click here. You can also check out our

where we do daily flood education videos. You can also check out our

Remember we have an educational background in flood mitigation. This means we are here to help you understand your flood risks, flood insurance, and mitigating your property.

 

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It's the question that gets asked probably a hundred times a week. Insurance agents, property owners, and even banks want to know the answer.

Everyday we see FHA loans fall apart because of flood insurance. Many times flood insurance through the National Flood Insurance Program can be higher. Then you might have to pay the cost of an elevation certificate.

In 2019 FDIC made a major move in the industry when it started to allow private flood insurance.

People assumed this meant FHA would start accepting private flood insurance. However, because FHA insures loans they have different guidelines they do not accept private flood insurance. As of July 2022 FHA still only allows flood insurance through the National Flood Insurance Program, but hopefully, that will be changing soon.

On November 10, 2020 FHA made an announcement they were looking at accepting private flood insurance. They opened up a 60 day comment period for people to leave comments on this possible action.

So what happens next and what will be the impacts?

 

What's Next

After this 60-day comment period FHA will look at the comments and probably make a decision by the 2nd quarter of 2021. If they decide to approve it then they would probably delay it going into effect by 6 months. This is what FDIC in 2019.

So what could the impacts be?

 

The Impact

Well if you currently have an FHA loan then these could possibly cause a major decrease in your mortgage payment. You might see a 40% rate decrease in the private market.

 

However if this is passed don't go and try to jump to the private market right away.

FEMA has strict guidelines for cancellation. Unless you are refinancing your house you may not qualify until your policy is up for renewal.

 

In 2019 we saw a lot of people lose money because of FEMA cancellation rules. Many times private carriers require payment up front and charge minimum earned premiums.

This means you might be out 25% of the money you paid for a private policy because FEMA won't let you cancel.

 

We will continue to monitor this situation and continue to educate the public as this process moves forward. If you have questions about your flood insurance options then click here.

Want to learn more about flood insurance?

Check out our YouTube channel and Podcast.

Remember we have an educational background in flood mitigation which means we are here to help you understand flood risks, flood insurance and mitigating your property long term.

 

Buy Flood Insurance Now!

Flood zone AE also referred to as the 100 year flood zone has the highest premiums other than coastal areas. These are generally because most of the structures have a negative base flood elevation. So what determines the premiums of these zones?

Well there are a few things that have a major impact on flood premiums in these zones. The age of the structure, the foundation type, flood loss history, and the elevation of the home.

Let's start with the age of the structure depending on when the house was built it will have a different rating model through FEMA. Its based on the first flood map for structure which generally occurred after 1978. If it was before the first flood map its called a PreFirm structure and if its after the first flood map its called a PostFirm structure. One of the big differences between these two types of structures is called grandfathering where you can keep the property in a preferred flood zone that no longer exists. This is allowed on PostFirm structures but not PreFirm structures.

The next thing that has a major impact on flood insurances rates in flood zone AE is the foundation type. Let's start with crawlspaces above grade compared to subgrade. Above grade is a crawlspace that sits above ground and subgrade is going to be crawlspace that sits partially below ground. The big difference here is subgrade generally will sit a certain level below the base flood elevation which increase the premium. While above grade sits above ground it could still be below the base flood elevation. The difference is things like flood vents can significantly lower the premiums with above grade crawlspaces.
The next type of foundation that will have a major impact on premiums are basements. As you can imagine basements can sit a good distance below the lowest adjacent grade creating a significant negative elevation. This can have a big difference on the rate so its very important to understand this when owning a house and purchasing a house. Also just because a basement is below grade does not mean that it is below the base flood elevation. Now that we have talked about foundations lets talk about how the elevation of the home in a flood zone Ae can impact the rate.The only real way to know this is to have a survey or elevation certificate completed. Now that we have discussed how the elevations of a home can have a major impact on flood insurance rates as you can see from the different foundation types.

Lets talk about positive elevations first and how they can have a big impact. The further your home is above the base flood elevation the better the rate is going to be. If all the elevations of your home are above the base flood elevation your home might even qualify for a letter of map amendment. This means that your property might be removed from the high risk flood zone and placed in a low risk flood zones causing a big improvement to property values. Now lets talk about the impact of negative elevations. As mentioned above basements can cause a home to have an extreme negative elevation. The higher the negative elevation a home has the higher probability of a flood occurring. This can create a double edged sword because the NFIP rates can be through the roof sometimes exceeding $10,000 a year for non coastal properties. However the other problem is the higher the negative elevation the less likely that a private insurance carrier will offer coverage on a property. So these are some things to think about when buying a home with a basement or building a home. we have discussed the impact foundation types can have on a structure lets talk about flood loss history.

Flood losses can have a major impact on a property. It could even stop a property from selling if severe enough. Generally when one flood loss occurs you would lose the preferred rating with the NFIP if you had one. Having a flood loss can also eliminate most of the private flood insurance options as most will not insure a property that has had a loss. However when the second loss and paid claim occur is when disaster can strike. This can turn a property into a severity loss property which has to follow certain mitigation guidelines in order to get insurance through the National Flood Insurance Program and private flood insurance is not available on these type of properties. This is why you should really review things closely before filing a flood insurance claim.

Have questions about flood insurance? Click the link below or visit The Flood Insurance Guru Find My Flood Risk & Flood Rate

Alabama has been always front and center when it comes to concerns of flooding. It's no surprise then that one of the biggest worries of property owners is their flood risks and equally where they land when it comes to flood maps.

In this blog, let's talk about the different flood zones in Alabama. We also want to discuss what areas are in a required flood zone and what areas aren't in a required flood zone.

Finding My Flood Zone in Alabama

Flooding in Alabama

Just in the last 2 to 3 years, the number of flood risks in the state of Alabama has drastically increased compared to the last 10 to 15 years. This is very much evident in how common it became for some areas in the state that receive 10 inches of rain in a 12-hour period. This immediately shows how higher the chance of flooding is becoming for most of these areas which become flood-prone. This is also why some areas find it uncommon to see at least 4 inches of rain just within 2 hours.

Finding My Flood Zone in Alabama

About a week ago, Limestone County in Alabama was immediately terrorized with flash floods to a point where Chapman Hollow Road at Alabama 99 had to be closed by Commissioner Townsend because due to all of the water that was over the road. This is after Limestone County got about 1.49 inches to 3.20 inches of rain last Tuesday.

This type of scenario shows how much floods have changed in the last few years in Alabama, and it warrants a proper explanation of how flood zones have a hand in this concern.

Understanding Flood Zones in Alabama

The first thing you need to know about flood zones in Alabama is that we generally separate these between low-risk flood zones and high-risk flood zones. Historically, low-risk flood zones were also called preferred risk zones, but as we move out of using flood zones as a basis for flood insurance premiums due to the Risk Rating 2.0, this isn't applicable anymore.

When we talk about low-risk flood zones, we mostly look at flood zone X. Before we move forward in discussing these low-risk zones, it's important to always remember that there's no such thing as "not in a flood zone". Each property across the United States is in a flood zone. It's crucial to understand that "not in a flood zone" are properties that are simply mapped into a low-risk zone.

Finding My Flood Zone in Alabama

Flood Zone X was called a preferred zone because generally properties in this type of flood zone have a lower risk of flooding and don't really have a requirement to carry flood insurance. However, it's becoming more of a myth now that floods don't happen in Flood Zone X as we're seeing more common flash flooding in Alabama.

On the other hand, you also have these high-risk zones which are also called the special flood hazard area (SFHA) that generally indicate an increased risk for flooding in that specific location. Flood Zone A is one of the most common high-risk zones you'll see in Alabama. Generally, when you start getting mapped into these zones, mortgage companies expect that properties in flood zone A should have flood insurance policies.

Flood Zone A is a high-risk zone due to the zone not having a determined base flood elevation. Generally, if you want to lower your flood insurance rates or be removed from being mapped into a high-risk zone like Flood Zone A, you will have to use an elevation certificate or a letter of map amendment. Generally, properties being moved into or are already mapped into these zones see a slight increase in their premium rates and flood risk.

Lastly, we have the Flood Zone AE which is somewhat similar to flood zone A however for these zones, the base flood elevation has been determined. This zone is also called the 100-year floodplain and has about 30% of flooding in a 26-year mortgage. Just like the previous flood zone, your mortgage lender will most likely require you to carry a flood policy if you're mapped into a Flood Zone AE.

Flood Zone AE's flood premiums are not determined by a single measurement alone. Most insurance companies, and even the National Flood Insurance Program (NFIP), now look into different flood variables such as the structure of your home, the type of foundation of your home, how much flood you get, what type of floods you get, and how much flood claims were made in a Flood Zone AE property historically.

Finding Your Flood Zone

When it comes to flood zones, generally you have to follow whatever's being indicated by your current flood insurance rate map (FIRM) from floodplain administrator. This generally means that if you're moving deeper into the SFHA, then you will have to adjust your expectations not just with the number of floods you will get, but also with your flood insurance rates. There's a directly proportional relationship between flood zones and flood risks after all.

However, this doesn't really mean that you will have to accept whatever expensive flood insurance premiums just because you're in a high-risk flood zone. In Alabama, a lot of new insurance companies are coming in to support the state when it comes to flood mitigation and protecting people from flood damage. This means that there are a lot of options to go through now.

Finding My Flood Zone in Alabama

Finding your flood zone in Alabama doesn't just mean knowing the flood zone you have, but how you can manage this better especially when it comes to the cost of flood insurance. Sometimes, you get into the wrong flood zone or maybe you want to remove your property from flood zones. Either way, we want to help you go deeper into understanding how the costs of flood insurance in Alabama are determined.

Flood Variables

Let's talk about positive elevations first and how they can have a big impact. The further your home is above the base flood elevation the better the rate is going to be. If all the elevations of your home are above the base flood elevation your home might even qualify for a letter of map amendment. This means that your property might be removed from the high-risk flood zone and placed in low-risk flood zones causing a big improvement to property values.

When it comes to the impact of negative elevations. As mentioned above basements can cause a home to have an extreme negative elevation. The higher the negative elevation home has the higher probability of a flood occurring. This can create a double-edged sword because the NFIP rates can be through the roof sometimes exceeding $10,000 a year for noncoastal properties. However, the other problem is the higher the negative elevation the less likely it is that a private insurance carrier will offer coverage on a property.

Flood losses also can have a major impact on a property. It could even stop a property from selling if severe enough. Generally, when one flood loss occurs you would lose the preferred rating with the NFIP if you had one. Having a flood loss can also eliminate most of the private flood insurance options as most will not insure a property that has had a loss. However, when the second loss and paid claim occur is when disaster can strike.

This can turn a property into a severe repetitive loss (SRL) property which has to follow certain mitigation guidelines in order to get insurance through the NFIP and private flood insurance is not available on these types of properties. This is why you should really review things closely before filing a flood insurance claim.

Finding My Flood Zone in Alabama

Flood insurance is now more important than ever in Alabama especially as we prepare for the sudden shift when it comes to rainfall amounts as we move into the Spring season.

If you have questions on flood insurance, we have a Flood Learning Center dedicated to answering all your questions and more when it comes to flood insurance. Click below to go to our Flood Learning Center page. 

Flood Insurance Guru | Service | Knowledge Base

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

A lot of changes had happened with flood insurance across the country. Kickstarted by the update to federal flood insurance with Risk Rating 2.0, a lot of things also need to be addressed when it comes to people who are buying and selling properties.

Things Realtors Should Know About Flood Insurance in Golden Isles, GA

Today's blog focuses more on the things you should know as a realtor in Golden Isles and Saint Simon Islands, Georgia when it comes to flood insurance.

CBRA Zone

One of the most important things we need to address is the overall geolocation of Saint Simons Island, Georgia, and why it's important for realtors to know why being in the coastal zones is important when it comes to flood insurance.

The Coastal Barrier Resources Act (CBRA) is generally the federal government's move in order to ensure that our coastal barriers are developed and modified. Considering that the properties in Saint Simons Island are basically within reach of the coasts of the Atlantic Ocean, the CBRA is implemented in the area.

Being in a coastal area like this will no doubt see its structures flooded due to storm surge, coastal erosion, or worst tsunamis. With the risk of flooding this high, you might be doubting if flood insurance is available for property owners of Golden Isles.

Is Flood Insurance Available?

The good news for realtors is that you can still sell houses in Golden Isles and secure that flood policy for your customer to protect both buildings and personal property however, there's a catch. The thing is, properties that are already built or under construction are the only ones that can get flood insurance through the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP). It's important to mention that this is only applicable if the property itself is prior to the prohibition date of the Coastal Barrier Resources System (CBRS).

As a realtor, it's also important to note if there are substantial improvements that are "over 50 percent of the structure's market value" made for the coastal home, flood insurance will no longer be available from FEMA and the NFIP. 

Changing Flood Zones

We've mentioned in the introduction how Risk Rating 2.0 is changing the flood insurance scene. One of its biggest impacts is moving out of using flood zones as a basis for flood insurance rates.

You might have encountered a lot of potential buyers rejecting to buy a house in Saint Simons Island because it's basically flood-prone and it's located in a high-risk flood zone. Generally, these concerns lean more towards homeowners being scared off by potential flood insurance rates skyrocketing.

The good news you can tell as a realtor is that being in a coastal flood zone, like Flood Zone V, won't really impact flood insurance premiums with the Risk Rating 2.0 in federal flood insurance. This is one thorn you can snip off their sides since basically all the flood premiums' would be concerned of are things like how much flood happens in the area, what type of floods impact the property, are there flood mitigations made in the property, and how it's built like the property's foundation to name a few.

So it doesn't really matter anymore if you're selling a property that's in a high-risk flood zone since it won't these flood zones no longer have a bearing on overall flood insurance costs. It's important to note, however, that a flood insurance policy will be required by the buyer's mortgage for any/all properties that are located in a high-risk flood zone or the special flood hazard area (SFHA).

Benefits of Private Flood Insurance

Lastly, we've been covering most of these flood insurance tips for federal flood insurance, so it's due time we move to the other flood insurance option. It's not always that FEMA and NFIP are your only way to get flood insurance.

Private flood insurance has been known for providing a more convenient flood insurance policy for homeowners and business owners alike. This is mostly owed to the fact that private flood generally has cheaper flood insurance premiums.

It's also important to note that even before there was a Risk Rating 2.0 update, most private insurance companies base their rates or premiums for flood insurance on what's called a flood risk score. This flood risk score looks into multiple factors and determines the overall risk of flooding for the specific property.

READ: Risk Rating 2.0 Georgia

This is something that every realtor should know by heart because once your buyer starts shying away after seeing a quote for flood insurance from FEMA and NFIP, you can guide them to their other flood insurance option.

Things Realtors Should Know About Flood Insurance in Golden Isles, GA

Another benefit of going through private flood insurance is its coverages. When you go to federal flood insurance and the NFIP, you'll have to get coverage for at least 80% of your property. This insurance coverage from NFIP also maxes out on $250,000 for residential building coverage and can go up to $500,000 for commercial properties. Both residential and commercial properties only get $100,000 in contents or personal property coverages.

The same can't be said for private flood insurance since most of these carriers will allow you to find more flexibility for coverages. So if the property is less than $250,000, you can still have it fully covered and have your customer lower their premiums. On the other hand, this also means that there are no coverage limits, so properties that are valued at more than $250,000 (i.e. $350,000) will get full coverage.

All of these benefits can easily be provided to the property within 3 to 14 days which is a drastic difference between the strict 30-day wait period of NFIP.

As a realtor in Glynn County, Georgia, this flood insurance information is something that you should know since it may directly impact your sales. It's important to note that at least 72.8% of Glynn County's residents will see an increase in their flood insurance rates with FEMA and NFIP.

So if you have any questions on flood insurance, click below to access our Flood Learning Center.

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You can also click the picture below to call us for your flood insurance concerns.

The Flood Insurance Guru | 2054514294

Remember, we have an educational background in flood mitigation which lets us help you understand flood risks, flood insurance, and how these impact the real estate industry.

Alabama is no stranger to flooding. Be this due to consistent rainfall to hurricanes making landfall near the state, almost throughout every year, Alabama will be a victim of this type of natural disaster.

Three Most Common Flood Zones in Alabama

Today, we want to do a deep dive into why flooding is very common in the state and discuss the three most common flood zones in The Heart of Dixie state.

Lookback on Alabama Floods

The state is no stranger to floods especially due to flash flooding. Most of the counties in the state face flood as one of the biggest challenges from heavy rains to tropical storms passing by.

Despite having only one named storm in the last quarter of this year, it doesn't mean everything will be calm. We're still seeing a lot of rainfall and persistent precipitations across the country. In most cases, these conditions are enough to cause enough flooding and damage to multiple areas.

Take note, this is without a tropical storm present and at the most extreme caused by monsoons. Why is this happening you might ask?

We can owe it to what's called the La Niña. La Niña is a "cold event" wherein trade winds are stronger than usual which pushes more warm water toward Asia. Being the exact opposite of El Niño which is commonly known as the "heat event" that leads to week-to-month long droughts in South America and California, La Niña is a mixed bag of weather conditions that are very unpredictable and usually exceed the expectations.

This generally causes some areas of the United States to be very dry while some get very wet. To give an example, 80% of Stanislaus County in California is experiencing very extreme to exceptional drought hence the "very dry" conditions. Add this to the already dried-up ecosystem due to the wildfires, it's no question why the drought continues in the state. However, it's equally important to note that these types of events may just be scratching the surface when it comes to the dangers it presents to locals.

On the other hand, if we look at areas like Washington, a lot of atmospheric river impacts are being felt due to La Niña hence causing floods in the area up to the northwestern regions even in British Columbia. We've also seen how the shift from having warm surface water to a much colder one impacts the weather in areas like Northern California. The northern part of the state recently had to face devastating damages due to atmospheric rivers causing an extreme rain event in the area.

These are just a few of the examples we're seeing in the past few weeks however this doesn't mean that everything ends there. We can still expect more effects of the "small girl" as we end the year and go through the winter season.

Most Common Zones in Alabama

There are three most common flood zones we see the cover of the households in Alabama, these are Flood Zone X, Flood Zone A, and Flood Zone AE.

Other than the letters you might be wondering how these flood zones differ, so we'll discuss that

Flood Zone X

If your property is "not in a flood zone" then you're most likely to be in a flood zone X. Generally this zone has the lowest flood risk due to its relative distance to floodplains where flooding commonly starts. This simply means that flood insurance generally isn't required since the probability of a flood or risk of flooding, and impact a building or property in such zones is much lower than other flood zones.

Keep in mind that we're talking about a low-risk zone and not a no-risk zone. This is generally due to flash floods being more commonly experienced by flood zone X which causes significant flood insurance losses due to the damages.

Some mortgage and/or insurance carriers would also call these preferred flood zones. This is called a preferred zone since it has more favorable rates for the homeowner and risks for the insurance carrier. Even with FEMA, being in a low-risk zone brings a lot of good things because Flood Zone X has lower rates even in flood-prone Alabama. 

As we move into Risk Rating 2.0 where flood zones don't impact flood insurance rates, if your property sits on a Flood Zone X, you won't be required to carry flood insurance. However, it's important to remember that 30% of flood insurance claims do come from the homes in Flood Zone X.

Flood Zone A

Let's say you move into someplace else and the property or building is marked as moderate to high-risk flood zones.  Flood insurance is mandatory in areas under Flood Zone A on a property(s) with a mortgage or any additional interests in the property or building.

Generally, this zone falls outside of the preferred zones due to higher changes and flood risk overall. In FEMA's legacy program, this is where you'd start seeing some significant increase in the rates of your flood insurance policy. 

Another important thing you should remember about Flood Zone A is that its base flood elevation isn't determined yet many times. This makes it a challenge for flood zone changes and flood maps since there's no assurance where the base flood elevation starts. You might wake up one day with your kid's teddy bear soaked under 3-feet of floodwater... or maybe not.

 

In this case, do keep in mind that when someone tells you to give your house an elevation certificate or you need flood vents for your home, you should always think carefully multiple times if you're standing on Flood Zone A; you wouldn't want your wallet drained of money.

In regards to Risk Rating 2.0, flood zone A simply means that you will be required by your mortgage or FEMA to carry flood insurance on your property. However, being in a higher-risk zone will no longer cause an increase or any impact on your premium rates.

Flood Zone AE

Lastly, the area where lifeboats should also be considered a necessity. All jokes aside, this zone has the highest risk when it comes to flood zones outside of the coasts and is also known as a 100-year flood zone.  Since Flood Zone AE has a 0.2% to 1%  flood threat at any given month and/or year as it's getting closer to the coast.

Unlike the previous high-risk zone, most properties in the AE zone have determined base flood zones. This is also why it's a higher-risk zone compared to the A zone. Due to this, FEMA and other floodplain management agree that certain conditions can be enough to cause small floods, flash flooding, or widespread floods in that area.

Like Flood Zone A, this zone also requires and mandates that a property must have flood insurance in place especially when there's a mortgage and/or any additional interests.

You don't have to worry since you have options in getting your flood insurance to secure your property values: the National Flood Insurance Program (NFIP) or through the private market (private flood insurance). 

Not being aware that you're moving into a special flood hazard area can cause an immeasurable headache for your bank as flood insurance will be required no matter what, and when someone tells you to give your house an elevation certificate, you should probably consider getting one with some flood vents if possible as this can help lower your rates even in Risk Rating 2.0.

Despite removing flood zones as a basis of rating in Risk Rating 2.0, flood mitigations like installing flood vents, securing elevation certificates, elevating your home, and other mitigation efforts are appreciated and will bring you enough decrease to make that FEMA rating easier to manage.

Flood Insurance Guru: Alabama

For this part, we really want to share our experiences serving homeowners and business owners alike when it comes to the residential or commercial properties they want to protect from flood damage and flood loss.

Looking at our data over at Flood Insurance Guru, about 25% of the flood policies we were able to handle in Alabama are currently zoned in Flood Zone X. However, considering that there is impactful development when it comes to the behavior of water and frequency of runoff and flash floods, even low-risk zones aren't really that safe from flooding.

On the other hand, about 21.2% of the policies we have for Alabama are in Flood Zone A. This can be very alarming, if this number rings true to all properties in the state, as homeowners and floodplain management don't really have a clear insight when it comes to the base flood elevation for at least 20% of the properties across the state.

Lastly, in our database for the customers, we have from Alabama. At least 53.7% are mapped into Flood Zone AE. When it comes to floods, this means that more than half of the properties in Alabama have identified base flood elevation and also are more flood-prone due to possible floodplain devolvement.

As you can see, most of the properties in Alabama are in a flood zone. Regardless of being in a Flood Zone X, A, or AE, properties will still get flooded. Basically, saying that a house is "not in a flood zone" is a myth. We want to raise awareness for these types of things especially since flood insurance is something that you really don't have included in any other insurance.

If you have questions on your flood zone in Alabama,  what are your flood insurance options in the state, or anything related to flood and insurance, click the links below to reach us. You can also access our Flood Learning Center by clicking its graphic below.

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

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The federal flood insurance industry has changed a lot since the Risk Rating 2.0. One of the biggest changes is how the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) will look at flood zones. FEMA, NFIP, and mortgage lenders would have to only follow the new rating system and regulatory standards of the Risk Rating 2.0.

Are Preferred Flood Zones Gone?

As natural disasters are becoming progressively more destructive and unpredictable, we want to discuss how changes on looking at flood maps would change.

Risk Rating 2.0

The implementation of the Risk Rating 2.0 or simply NFIP 2.0 significantly impacts the rates going around with federal flood insurance. For the most part, this means that there will be an increase in rates as the new program gears towards a more accurate flood risk per property. We'd like to call this the fingerprint of your flood risk due to the nature of having an individual property getting a unique risk rating score.

This program basically says that each property will get a unique flood risk score per variable with the rating engine system in from both the legacy program from Federal Emergency Management Agency (FEMA) and new things coming into consideration.

The things that will carry over from the legacy program which will still have a bearing on your flood insurance rates are as follows:

  • Flood zone designation based on community flood maps. Flood zones also have the bearing to require flood insurance if you're in the Special Flood Hazard Area (SFHA) or High-Risk Zones
  • Flood Insurance Claims. Despite changing to a claims variable system, flood claims with FEMA may still impact your overall rates.
  • Policy assumption and policy transfer.
  • The Grandfather Rule.
  • Pre-FIRM and Newly Mapped discounts.

Are Preferred Flood Zones Gone?

The new things that will impact your rates will be from:

  • Types of flooding that your property experience.
  • Flood frequency.
  • Distance to any water source.
  • First-floor height or distance of the first livable area to grade (ground).
  • Elevation of the structure or the property itself. How high is the first floor of the property compared to the ground hence properties that are elevated are most likely to get a decrease due to this.
  • Replacement costs. This means that higher-valued homes will get an increase and lower-valued homes will get a decrease due to the overall expenses to rebuild the property due to flood damage.
  • Flood Risk Mitigation Measures made on the property.

Despite these changes to the overall rating engine systems in the Federal Emergency Management Agency (FEMA), your flood insurance policy will still follow the same amount of $250,000 for building and $100,000 in contents max for flood coverage.

The Increased Cost of Compliance (ICC) is also one of the things that will carry over from the legacy National Flood Insurance Program to this new program as well as the Community Rating System (CRS) discounts.

 

Are Preferred Flood Zones Gone?

Traditionally with the National Flood Insurance Program (NFIP) and even in private flood insurance companies, you'll see low-risk flood zones and special flood hazard areas (SFHA) or high-risk flood zones. I can even remember the time where I can tell your flood insurance premiums in these low-risk flood zones like Flood Zone X depending on the coverage amount. So you'd see immediately how these low-risk zones or preferred zones immediately impact your rates and these rates are about $400 to $600 per year.

On the other hand and you would notice with the new program through Risk Rating 2.0, flood zones no longer impact your flood insurance rates with FEMA and the NFIP. So the perks of being in a preferred zone and that preferred rate will no longer be in the picture. This means that federal flood insurance will no longer rely on a Flood Insurance Rate Map (FIRM) to say that you will get a preferred rate since flood zones don't impact rates anymore.

Are Preferred Flood Zones Gone?

On the other hand, it's a different story when it comes to the private flood insurance industry. We're still noticing a lot of private flood carriers who look into these low-risk zones and provide that same preferred rating on premiums of about $400 to $600. It's important to note also that since these insurers are managed by private companies, they don't necessarily need to follow the changes coming to federal flood insurance.

Despite these changes and flood zones only becoming more of a factor that determines whether or not you're not required to buy flood insurance for your property, it's still important to get a form of security for a property. If you want us to help you get a desirable quote from both federal and private flood insurance, click the link below to reach us.

Buy Flood Insurance Now!

We also have a flood learning center where we try to answer your frequently asked questions about flood and flood insurance.

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Remember, we have an educational background in flood mitigation which lets us help you understand your flood risk, flood zone, flood insurance, and mitigating your property long-term.

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A lot of things will be changing once the new national flood insurance program kicks in next month. This will impact mostly rating as the new Risk Rating 2.0 from the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) aims to provide a more accurate representation of flood risks when it comes to flood insurance premiums.

Will NFIP 2.0 Stop People From Buying Flood Policy in Low-Risk Zones?

Today, we want to talk about the impacts of this new program and will it stop property owners from buying a  flood insurance policy for their homes even in the low-risk zones?

NFIP Risk Rating 2.0

The new program from FEMA and the National Flood Insurance Program (NFIP) is long-awaited and long overdue. It's been 30 years since FEMA last made an update this big. Let's do a quick recap of what's changing with federal flood insurance in order to better discuss how this will impact the participating communities across the United States.

The Risk Rating 2.0 will mostly impact the rating structure within the National Flood Insurance Program (NFIP). This is because flood zones will move into a regulatory force that comes into play with flood insurance instead of directly impacting the rates.

Here are the old and new things coming into the picture when it comes to how you're rated. All in all, this will be called the flood risk score.

The remaining features are as follows:

The new things that will come with the Risk Rating 2.0 are as follows:

  • Types of flooding that your property experience. This can be either pluvial or the accumulated water due to rain, runoff of collected water that flows from higher areas; coastal which are storm surge or coastal erosion; fluvial or river floods, or sometimes a combination of these.
  • First-floor height and elevation of the structure. A new feature that determines your flood risk score is the distance between the ground (grade) from your first floor or the first habitable floor of your property.
  • Flood risk mitigation measures made on the property. Is the lowest floor above the base flood elevation? Are there enough flood openings to let floodwaters through?

It's important to emphasize that the Risk Rating 2.0 will show different rates per household, and this new program is expected to cause an increase for most policyholders since we'll be able to see the risk of flooding on our property.

Impacts on Low-Risk Zones

When it comes to flood insurance, it's no secret that when you fall into a high-risk flood zone or high-risk area, your rates can really blow of the roof regardless if you're getting it from FEMA or the private insurers. However, once the Risk Rating 2.0 starts, a lot of properties in low-risk areas will also see a higher amount when it comes to their overall premium.

Since the risk of flood damage is very detailed, we can also expect these low-risk areas to get higher rates to match the flood coverage they will get from Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

Will NFIP 2.0 Stop People From Buying Flood Policy in Low-Risk Zones?

The rates for these flood policies in low-risk zones will also be relatively more expensive compared to the previous program although it would retain the same building coverage and contents coverage. This also directly increases the annual premium from FEMA.

This type of change in the industry is sure to scare a lot of new property owners and new flood insurance policyholders. A good portion of the population might even avoid getting flood insurance at the expense of their security against flood water just because it's a huge burden for their wallets.

The Big Problem

It's normal to see that people will start shying away from buying flood insurance since the rates and premiums from FEMA and the NFIP will get an increase. However, the big problem here is that a lot of people from property owners, agents, and mortgage lenders don't really look at their options.

The truth is that floods don't really stop at a flood zone, so even in low-risk areas, you can still get the same flood damage or chance of flooding with high-risk zones. This is especially true in seasons like we have now where a lot of hurricanes happen. Last year, the Federal Emergency Management Agency (FEMA) found out that at least 25% of the flood insurance claims come from properties that are in low-risk flood zones.

Will NFIP 2.0 Stop People From Buying Flood Policy in Low-Risk Zones?

You really don't need to be anxious about flood insurance rates and second-guess whether or not you should buy one. You should since we're talking about protection from flooding for your home and everything inside of it.

If you're one of the people who are thinking of not getting a policy due to the higher cost of flood insurance, you should know that there's always an option outside of federal flood insurance. You see, a lot of homeowners don't really know that there are dozens of private insurance companies which offer the same protection, coverage, or most times, even more, when it comes to flood insurance.

Going Private

We've talked a lot about the comparison between federal flood insurance and private flood insurance. We've created a lot of content solely focused on how these fair up in the flood insurance market from claims, coverage, pros, and cons. For this one, we want to focus on why it's best to have a second option through a private company when it comes to flood insurance.

Since flood insurance is a separate policy from your standard homeowner's insurance policy, most of the time, and depending on your loan type, your mortgage lender will allow you to choose where to get flood insurance. This can really be a big deal especially for those in high-risk flood areas like flood zone A where flood insurance will be required with the property.

READ: The Rematch: NFIP 2.0 vs Private Flood

Private flood insurance can also have your back when it comes to building coverage and contents coverage. Most of the private flood insurance companies would also offer additional coverages like replacement costs, additional living expenses, or loss of use.

The great thing about private flood is that it costs significantly cheaper with more flexible coverage compared to federal flood insurance. This is that "get more, pay less" aspect that really helps a lot of homeowners get protected even when they're in a flood-prone area.

Simply put, there are no coverage limits with private flood hence you can get more than $250,000 for your house and more than $100,000 in flood insurance coverage for your personal property or contents within that building.

Other than the flood insurance cost, you also have a better and shorter waiting period. The NFIP can have your policy take effect on your house after the 30-day waiting period from the date of the flood insurance purchase whereas private carriers can get your policy to take effect on the insured building within 5 to 14 days maximum.

The Real Threat

We understand that seeing standard flood insurance policy rates go high can really scare anyone. We're currently going through a pandemic still and a lot of expenses are needed. However, it's important to keep in mind that the real threat doesn't fall within the policy jacket or its costs. The real threat is when that water starts inundating your house.

It's always best to make sure that you're protected through flood insurance.

If you have any questions on how to buy flood insurance from the private market, the NFIP Risk Rating 2.0 impacts, or anything about flood insurance, click below to reach us.

Get Your Flood Risk Score Here!

Buy Flood Insurance Now!

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

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When it comes to flood insurance, once you're exposed to it you also start to encounter one of the most prevalent terms in the industry: flood zone.

Many property owners would say that they're not in a flood zone because either their real estate agent, mortgage, or insurance agent would tell them so, but are you really not in a flood zone?

The Flood Insurance Guru | Not in a Flood Zone: What Does that Mean?

Flood Zone

First, let's go over what a flood zone is. The Federal Emergency Management Agency (FEMA) who manages the National Flood Insurance Program (NFIP) or the federal flood insurance would define flood zones as an area with a specific type of flood risk according to geographical and historical data.

It's important to note that, generally, all flood insurance companies depend on FEMA's words when it comes to flood insurance. The data is dependent on floodplain devolvement in that area, floodplain status, proximity to a body of water like creeks, lakes, or rivers, history of flooding, the chance of flooding, and things like that to create an output that what we call a flood map or Flood Insurance Rate Map (FIRM).

A flood map of an area or community can show multiple flood zones since it depends on the flood risks that this area faces. These zones can range from low-risk flood zones to high-risk flood zones or special flood hazard areas (SFHA).

Now, what does it mean when people start saying that they're not in a flood zone?

 

Not in a Flood Zone?

When it comes to flood zones and flood insurance rate map (FIRM), there's no such thing as not being in a flood zone. This is a common misconception that people can get because, truth be told, every house, building, and property actually sits in a flood zone. It just depends on what type of flood zone you're in.

You see, when people say that they're not in a flood zone, this generally means that the property is not sitting in the special flood hazard area (SFHA). When it comes to the Federal Emergency Management Agency (FEMA), every house has a flood zone designation.

Most likely, when your mortgage or agent tells you that the house is not in a flood zone, what they meant is that you don't have to go face a mandatory flood insurance purchase because it's not in a 100-year flood zone.

Examples of a 100-year flood zone are flood zones A (flood zone A, flood zone AE,  flood zone AH, flood zone AR, flood zone AO) or even a flood zone V which is the coastal flood zone.

What this probably means is that when it comes to flood zone maps, the property is sitting on a flood zone C, flood zone B, or even flood zone D. Most likely, this may show up as a flood zone X and the reason why they say that you're not in a flood zone is that your flood insurance won't be required since you're in low-risk flood areas.

The Problem with Low-Risk Flood Areas

Now, it's easy to find peace of mind when you realize that you're in a low-risk flood zone where the requirement for flood insurance isn't really there at all. The problem with these zones is that 30% of the flood insurance claims come from this area according to FEMA and the National Flood Insurance Program (NFIP). Homeowners that say that they're not in a flood zone are the ones that comprise that 30% and we're only talking about FEMA's numbers.

Being in a low-risk flood zone doesn't really mean that you won't get flooded like the high-risk flood zone. There might be minimal flood hazards in the area which is why it shows that you're in these zones, but there are varying reasons why a property owner in a flood zone X can be flooded.

We've also seen low-risk zones get flooding damage due to flash floods and other severe floods throughout the year.

This is why we encourage everyone to secure flood insurance policies for their residential property or even commercial flood insurance for their business. The chances of flooding can be very low one day then skyrocket the other day, given the right circumstances. 

So when you hear someone tell you that you are not in a flood zone or they are not in a flood zone, take time to reach out to your local floodplain management standards and officials or your insurance agent to really identify what your flood zone is. It's better to be safe than sorry when the risk for flooding becomes too high and loss from flood damage becomes too unbearable.

If you have any questions on flood zones, maybe you want to know what flood zone you're in, what your flood insurance options are, or anything about a flood. Reach out to us through the links below.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks, your flood insurance, and mitigating your property long term.

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