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What Determines The Cost of Birmingham AL Flood Insurance in Zone AE

July 19th, 2020 | 3 min read

By Chris Greene

What Determines The Cost of Birmingham AL Flood Insurance in Zone AE

Cracking the Code of Flood Zone AE in Alabama: Unraveling Flood Insurance Costs and Coverage

 

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.

Also in the Birmingham Alabama area the number of flood insurance policies could have an impact on flood insurance rates. Many private flood insurance companies in areas like Birmingham, Pell City, Bessemer, Jasper, and even Anniston Alabama can max out the number of flood policies they offer just half way into the year.

This is a major issue we have seen in the last year with people building homes in areas like Trussville Aalabama.

So lets get back to some of the orginal factors.

 

FEMA Guidelines and the Age of Structure: PreFirm vs. PostFirm Structures Explained


Let's start with the age of the structure depending on when the house was built in Birmingham Alabama will have a different rating model through FEMA. It's based on the first flood map for structure which generally occurred after 1978. If it was before the first flood map it's 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 Birmingham property in a preferred flood zone that no longer exists. 

This has been a common practice in areas like Pinson Al and Center Point Al where flood maps have been changed in recent years.

 

The Foundation Factor: How Crawlspaces Impact Flood Insurance Rates in Birmingham, Alabama's Flood Zone AE


The next thing that has a major impact on flood insurance rates in flood zone AE is the foundation type. Let's start with Birmingham Alabama properties that have crawlspaces above grade compared to subgrade. Above grade is a crawlspace that sits above ground and the subgrade is going to be a crawlspace that sits partially below ground. The big difference here is subgrade generally will sit a certain level below the base flood elevation which increases 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.

 

Foundation Types and Home Elevations: Key Factors in Birmingham, Alabama Flood Insurance Rates


The next type of foundation that will have a major impact on premiums is basements. Because of severe weather and being in a popular tornado state Birmingham is known for having basements on many properties. 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 it's 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 let's 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.

 

Elevating Your Savings: How Positive Elevations Affect Birmingham, Alabama Flood Insurance Rates


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 on your Birmingham Alabama property. If all the elevations of your home are above the base flood elevation your home might even qualify for a letter of map amendment. In recent years we have helped a lot of Birmingham Alabama property owners get flood premiums back by getting the flood zone corrected. This means that your property might be removed from the high-risk flood zone and placed in a low-risk flood zone causing a big improvement in property values.

 

Navigating Negative Elevations: Understanding their Impact on Birmingham, Alabama Flood Insurance Rates

Now let's 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 the 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 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 let's 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, 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 types 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

 
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Chris Greene