Alabama is a buyer beware state what exactly does this mean for Pelham Alabama homebuyers?

According to the Alabama Real Estate Institute, this means you must notify the buyer that it is their responsibility to have the proper inspections performed on a home before they actually close on the sale. The buyer is not to rely on the seller to disclose all imperfections of a property when making a decision whether to buy or not to buy.

This basically means "buyer beware". It is an interesting time for a buyer to beware in the state of Alabama right now especially Pelham Alabama. 

Pelham Alabama experienced a significant flood in October 2021. As these properties are being repaired. many are being sold. This can be challenging since it is a buyer beware state. It's especially challenging because of the crazy real estate market right.

So is there any way to protect yourself as a buyer to determine if a property has flooded?  Yes, there are a few things we are going to discuss that can help you.

We are going to look at inspections and ask the right questions

Home Inspections

Home inspections can play an important role in determining if a property has had water damage. About a year ago my wife and I were looking at properties to purchase. We were actually able to use the home inspection report to determine that water had actually entered the property causing damage. The inspection has helped us see that the issues that caused the water damage had been fixed. 

 

Asking the Right Questions

Protecting yourself as a buyer can come down to asking the right questions. This is why it is always smart to work with licensed real estate agents when asking property owners questions about a property. Many times a real estate agent knows what questions to ask because of their experience in dealing with property sales. 

The home buying process can be tricky if the right questions are not asked. One of those questions should be has the property flooded since you have owned it or lived in it?

When doing a real estate transaction it might be that it's an investment property where the property owner has never lived in the property.

This is the case with many Pelham Alabama properties as many properties are smaller homes or even townhouses. 

It's also important to understand the flood zone and flood risk of the property. Mortgage companies will run a standard flood zone determination to determine if the Pelham Alabama property is in the special flood hazard area, If it is in the special flood hazard area then the flood zone is generally going to be flood zone A or Flood zone AE. You can learn the difference in the video below.

 

If the mortgage company comes back and says it is not in a special flood hazard area that is great it means that flood insurance will not be required. However, that does not mean that the property will not flood or has not flooded.

Many Pelham Alabama properties that flooded in October 2021 were not in high-risk flood zones they were in low-risk flood zones also called flood zone x. 

 

Finding out if a property has flood claims on it can be difficult since these losses generally can only be disclosed to the current property owner. So these questions can be very important it's also important to ask the owners of adjacent properties if they have ever experienced flood damage since living there.

As a buyer of course there are only so many questions you can ask. So you really have to do your due diligence to understand everything during the diligence period. Working with a buyer's agent or sometimes a single agent is one way to do that.

One thing is to get flood insurance quotes for the property through the National Flood Insurance Program and private flood insurance companies. You can watch the video below to learn about the difference.

 

So are there any exceptions to the buyer beware law in Alabama? There can be some things that fall under health and safety and if you are lied to about a certain question. We are not licensed attorneys so we can not advise on these things. 

However, if you have questions about understanding your flood risk, how to reduce it, or different flood insurance options then we can help you. 

You can check out our learning center here

Flood Insurance Guru | Service | Knowledge Base

You can also give us a call

The Flood Insurance Guru | 2054514294

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.

As the country steadily moved into the Fall season, the southeastern region of the United States was hit by a substantial amount of rainfall. This was enough to cause flooding in some states, but the one most impacted was Alabama.

Alabama Flooding; President Biden Approves Disaster Declaration

A lot of families were faced with flood damage and today, we want to talk about how the federal government — under President Joe Biden, Jr. — are looking to help the victims of the flooding. Let's talk about how the disaster declaration issued on December 21st is going to help the people of Alabama in recovering from the flood loss during the October flood.

Alabama October Flooding

Shelby and Jefferson County received a significant amount of rainfall in October. According to National Weather Service (NWS) Birmingham, Alabama, several waves of slow-moving, intense storms brought estimated rain rates as high as 4-5 inches (100 to 130 mm) per hour late on October 6th, 2021.

The flooding itself was so bad that fire officials said they responded to 282 calls for assistance. This is outside of the 82 rescues that had to be done in homes and about a maximum of 20 for stranded vehicles in Pelham, Alabama alone.

Alabama Flooding; President Biden Approves Disaster Declaration

This event also caused a lot of casualties. At least four people died including children. Most of these deaths were vehicle-related meaning to say that the victims got overwhelmed with water while they are in their vehicles. These people and their respective families are in our thoughts.

When there's a flood, there's also bound to have damages on multiple infrastructure and properties. 

The Presidential Declaration

As of December 21st, President Joseph R. Biden Jr. approves the disaster declaration for Alabama. This declaration is in order to provide federal assistance to the state's residents' wellness and recovery from the damages of the flood. The President’s action makes Federal funding available to affected individuals in the counties of Jefferson and Shelby.

According to the Federal Emergency Management Agency (FEMA), major declarations like this generally mean that provide a wide range of disaster assistance programs for individuals and public infrastructure, including funds for both emergency and permanent work.

Alabama Flooding; President Biden Approves Disaster Declaration

How It Helps

The federal assistance includes grants or financial assistance for temporary housing, low-cost loans to cover uninsured property losses, and other programs to help individuals and business owners in Alabama recover from the effects of the October flooding. Most importantly, this also includes home repairs.

Focusing on the damages of the storm on properties, we want to focus on how this assistance can help recovery efforts for both residential and commercial properties. Damage assessments will be made based on your property's cost to repair and not the cost of repair.

Cost to repair basically focuses on the actual value of your property in its before-damage condition or before it was damaged by the October flood. This also includes any necessary actions to meet the basis for hazard mitigation against floods as set by FEMA. We also call this flood mitigation which acts as the first line of protective measures to reduce the damages when floodwater starts to inundate your property.

Calculating this will be managed by the federal assistance team, but you can also do this by following the formula below:

Alabama Flooding: President Biden Approves Disaster Declaration

Cost of repair generally is concerned with any specific action done to repair a property. For example, getting your paint and tape redone will have cheaper costs and doesn't guarantee that it can bring back the property to its pre-damaged condition.

It's important to keep in mind this major difference between the two as you may also be involved in recovering, repairing, and rebuilding your home. Property damage as a whole will be considered and not just the specific costs to certain repairs being done to your home.

Recovering from flood damage can be very tedious especially now that Risk Rating 2.0 expects homeowners to have all of their properties meet flood mitigation efforts or else face expensive flood insurance rates from FEMA. This is for the best considering that flood loss isn't something to be taken lightly.

Alabama Flooding; President Biden Approves Disaster Declaration

If you have questions on the cost to repair your home, if you have flood insurance and want to know how this can be helped with the new disaster declaration, or anything related to floods, click below to reach our team.

The Flood Insurance Guru | 2054514294

You can also go to our Flood Learning Center where we try to answer your flood insurance questions.

Flood Insurance Guru | Service | Knowledge Base

If you are one of the eligible homeowners in Shelby and Jefferson County, Alabama, you can begin applying for assistance by registering online at http://www.DisasterAssistance.gov or by calling 1-800-621-FEMA (3362) or 1-800-462-7585 (TTY) for the hearing and speech impaired.

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

 

Today we are taking a look at commercial flood insurance in Pelham Alabama. Flooding is the most expensive natural disaster in the United States every year. Pelham area is an area that has experienced major growth over the last twenty years. It is also an area that had some major flood problems in the 80's and 90's.

So today we are going to take a look at what to do when it comes to purchasing a commercial property in Pelham Alabama. Whether you are purchasing a true commercial building or an investment property it's important to understanding how to protect it when it comes to flooding and flood insurance. It is also important o know flooding is the leading natural disaster in the United States.

What Does Commercial Flood Insurance Cover?

 

  • Commercial building
  • Business Property
  • Loss of income (not by NFIP)

 

Commercial flood insurance also sometimes called business flood insurance can be tricky so its important to understand how things like flood claims and flood damage can impact flood insurance rates in Pelham Alabama. It is important to remember generally commercial property insurance will not cover flooding.

It's also important to understand how flood insurance coverages are different for a commercial properties.

So first of all is flood insurance required on properties in Pelham Alabama?

  • It depends on a few things like if you have a mortgage on the Pelham Alabama commercial property. If you have a mortgage and it is in the special flood hazard area then flood insurance normally will be required.

In Pelham Alabama the special flood hazard area is also going to be known as the 100 year flood zone. This will include flood zones like flood zone A and Flood zone AE.

The video below explains what the difference is here.

 

 

So you have found the right commercial property to buy?

What is next?

You want to make sure you have a copy of the flood loss history.

Due to privacy laws FEMA will only provide this to the property owner and it could take up to 30 days to get.

Once you have this you can better understand the flood risk on the property and the potential for flood damage in the future.

So now that you have that you have the flood history on the property you want to understand what flood insurance options are available.

Flood Insurance Options

There are two options available for flood insurance on commercial properties in Pelham Alabama.

Let's look at the National Flood Insurance Program first. This is also called the government flood insurance program or FEMA flood insurance. If entered correctly flood insurance rates should be the same no matter where you purchase the flood insurance from. 

National Flood Insurance Program Coverages

The following flood insurance coverage is available through the NFIP

  • Building coverage $500,000
  • Business property $500,000

It is important to understand that if your commercial property is a single family dwelling then it could fall under the the residential program with the National Flood Insurance Program. This means the following coverages could apply.

  • Building coverage $250,000
  • Contents coverage $100,000

 

Private Flood Insurance

The following flood coverages could apply to a commercial private flood insurance policy

  • Building coverage (not limited to $250,000 or $500,000)
  • Business property coverage ( not limited to $500,000)
  • Loss of use or loss of income (Business interruption coverage)

Understanding the difference in these two flood insurance options is very important. One reason is when you go to sell the property it could be a big difference.

For example many times policy assumptions are only available through NFIP. 

What is a policy assumption?

 

 

This can be very important if you decide to sell the property to someone who is doing an FHA loan on the property.

At the time this article is being written FHA does not allow private flood insurance.

Pricing and Mitigation

So is there a difference in pricing between NFIP and private flood insurance companies?

 

Yes we have seen where private flood insurance could be up to 60% less in many situations.

Currently private flood insurance companies use different technology to determine a flood risk score. Then this score is used to determine rates.

What about mitigation can it help with pricing?

Yes having things like flood vents on certain properties can help reduce the rates through NFIP. Some private flood insurance companies can use this in the rate for a flood insurance policy as well.

It is important to understand how these flood insurance coverages work when purchasing a property in Pelham Alabama.

So if you have more questions about commercial flood insurance policies in Pelham Alabama then click here.

You can also check out our daily flood education videos on our YouTube channel or even tune into our podcast.

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

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