As the storms keep coming, the changes to federal flood insurance come with it as well. Today, we want to unpack the upcoming changes to Flood Insurance Rate Maps (FIRM) in the Magic City, Birmingham, Alabama. We will understand the good, the bad, and the ugly changes coming to this town and what it means for flood insurance for its locals.

Alabama Flood Insurance: Birmingham Flood Map Updates

Birmingham, Alabama

Birmingham is still the city with the biggest population when it comes to the state of Alabama. However, Birmingham Alabama is dropping numbers — alongside Montgomery Alabama — when it comes to its population which according to Huntsville City is coming to a very close second and might even dethrone the city anytime soon. This type of development and growth can also mean that flooding can drastically change as well. We've seen earlier just this year how Birmingham, Alabama was hit with massive floods due to heavy rainfall.

Hopefully, you also realize that you really don't need to be in a flood zone to get flooded. Just this week of August 16, we saw a lot of places in Georgia, North Carolina, and Florida devastated with flash floods from continuous rain.

Today, we want to unpack the upcoming flood map changes to Birmingham Alabama, and although zone designation Flood Insurance Rate Map (FIRM) won't really impact your flood insurance rates with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) in their upcoming new Risk Rating 2.0 program. It's important to always keep in mind that this will be used from a regulatory standpoint. Generally, this still means that if you're in a high-risk flood zone, also known as the special flood hazard areas (SFHA), you're still expected to carry mandatory flood insurance for your property.

So what are the upcoming changes to Birmingham City on September 24th, 2021?

Alabama Flood Insurance: Birmingham Flood Map Updates

The Good

When it comes to good changes with this new flood map update, we'll be talking about the movement of properties impacted in the city. The good change generally means that buildings and houses that will be getting the best deal out of the floodplain mapping that FEMA is producing.

To be more specific, about 2,994 property owners will have their properties move out of a high-risk flood zone and into the low-risk flood zones. This is what FEMA calls the "in to out" movement. Some would call this moving to a Flood Zone X.

Low-risk flood zones are also known as the preferred flood zone or non-mandatory zones since this is where mortgage companies and the federal government would stop requiring homeowners to purchase flood insurance.

Yes, this means that 2,994 property owners can choose not to purchase flood insurance for their property however, fair warning to everyone, FEMA had constantly reported that 30% of the flood insurance claims come from these low-risk flood areas.

Simply put, this means that you're not really exempted from experiencing floods at all. We've covered this in our previous episode when we talked about the reasons why you might be flooded in a low-risk zone.

The Bad

Now, if there's good news, there's also bad news. This comes in the form of the opposite with the good movement that we're seeing which is what FEMA calls the "out to in" movement. This is generally because your property that wasn't in a high-risk zone or special flood hazard area (SFHA) will be moved into the SFHA and high-risk zones. Some would call this "moving from Flood Zone X to Flood Zone A."

Only 157 properties will be impacted by this change in FEMA Flood Maps to Birmingham. This is bad for a couple of reasons. One, since FEMA and the National Flood Insurance Program (NFIP) runs through a lot of flood data, they are seeing that your property or the general area that it's in has received an increase in current flood risk and/or possible future flood risk.

Another bad thing about this is that you will be required to start carrying a mandatory flood insurance purchase for your property because of the higher risks it's presenting. Let's be honest, being in a high-risk flood zone or the SFHA can be very expensive when it comes to flood insurance premiums in our current NFIP setup especially if you have a relatively bigger or more expensive property.

The Ugly

Lastly, we still have to discuss the biggest change and the ugliest among these three. The ugly change represents the "in to in" movement. This means that a property that's already in a high-risk flood zone will be mapped into a higher-risk flood zone. You can call this "moving from Flood Zone A to Flood Zone AE."

This will impact about 12,889 properties in Birmingham which is a very huge number. In fact, we rarely see an "in to in" movement that comprises the biggest chunk within these three changes. However, instead of worrying about a possible flood insurance rate increase (which will disappear by the time NFIP Risk Rating 2.0 kicks in), this simply means that when something like Tropical Storm Elsa happens again, you might face a bigger and more severe flood damage to your property.

Like the bad change, this also means that you have to carry a flood insurance policy on your property to make sure that it's protected at all times. This can also mean higher flood premiums in the current version of the National Flood Insurance Program (NFIP) for when you insure your property and since this will be a mandatory flood insurance purchase, you definitely have to prepare your wallet for it.

There are ways to make these bad and ugly changes easier to manage however. This starts with your preferred flood insurance option: the National Flood Insurance Program (NFIP) or the Private Flood market. Let's talk more about these two.

Flood Insurance Options in Birmingham


The National Flood Insurance Program (NFIP) is purely managed by the federal government since this is FEMA's answer to flood insurance. An NFIP flood policy can get you flood coverage on both your dwelling and the contents within it. When we say dwelling, this simply pertains to either the residential property or commercial building that you're trying to insure with NFIP and FEMA; contents will be more about the personal property and items you have inside the insured building.

There is a coverage limit when it comes to federal flood policies. Flood damage to buildings will be covered to a maximum of $250,000 for residential policies and can only go up to $500,000 maximum if it's for a commercial property. Regardless of the type of property you have written, you can expect to get a $100,000 maximum contents coverage from an NFIP policy.

There's also what's called the Increased Cost of Compliance (ICC) coverage. This is a $30,000 additional coverage for your property in order to make sure that there are flood mitigation efforts made on the property according to the federal government's standards. Generally, this can include sandbagging your property, installing floodproofing walls, raising your lowest floor from the base flood elevation levels, and putting flood openings. The labor that goes into making these mitigation efforts happen will also be covered under the ICC.

Alabama Flood Insurance: Birmingham Flood Map Updates

The good thing about the NFIP and FEMA is that they won't really push you immediately to the waters. Instead, they will allow you to ease into the possible flood insurance rate changes you'll be getting with your new flood zone. This is what's called newly mapped rates where FEMA will have you pay a lower flood rate or premium on your first year after the flood map update. This is also known as the Preferred Risk Policy (PRP) and will slowly start to increase until you meet the actual flood insurance premium expected to be paid for in your new flood zone.

There are also perks with your participating community in Birmingham. A participating community gets access to federal flood insurance and disaster assistance, but more importantly, you also get to work with your community on raising your Community Rating System (CRS) score. The CRS measures and rewards the overall flood mitigation efforts done by the community according to FEMA's standards on floodplain management. Simply put, the higher your CRS score is, the bigger the flood insurance discount you'll get from FEMA and the NFIP.

You can start enjoying your NFIP policy after a 30-day waiting period from the flood insurance purchase.

The Private Flood

If the federal flood insurance option doesn't really work for you then you can manage this new floodplain mapping through the private flood insurance market. It's important to note that this market will solely be managed and provided by private insurance companies which generally means that the red tapes FEMA and NFIP has to go through won't be there.

The first thing you'll immediately see with the private flood market is that there are significantly shorter waiting periods for your flood policy. Once you have everything settled and paid for, a private flood insurance policy can take effect on the same day or up to 14 days maximum. 

Another good thing coming out of private flood is that there are no coverage limits. This means that you won't really need to stress over how to get covered for a $500,000 home since it will be fully covered by your policy. This is the same with contents coverage and you'll also get additional coverages like replacement costs, additional living expenses, and loss of use.

Fair warning, it's a known issue in the private insurance market in general that they will do moratoriums when there are risks that are too high for their comforts. This simply means that they will either put a stop or take a break from providing flood insurance policies to a certain area that has higher risks. There's also a chance that you might not get to buy flood insurance from them once they decide to non-renew your policy.

At the end of the day, the choice of where you'll be getting flood insurance depends on you. What's really important is that you know your flood risks and have enough protection from all possible outcomes of a flood event such as flood loss and flood damage.

If you have questions on these new FEMA flood maps, maybe you want to determine your flood zone, knowing your area's average flood depths and flood data, or anything about flood, reach out to us.

Get Your Flood Risk Score Here!

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. 

The flood insurance world is constantly changing. You have flood maps being changed every year, you have new floodplain management guidelines, and you have rates all over the board.



Today we want to look at roles a realtor could play. Many people do not realize that realtors can play a major role in the flood insurance world. You have these different lobbyist groups pushing for change and you have some fighting change in Washington D.C.

So let's first look at how the flood insurance world could be impacted by realtors?

Let's start with a story from about a year ago where a realtor listed a property and sold a property in a special flood hazard area.

About 6 months after the new homeowner moved in the property flooded. After the flood claim the property owner got a notice that this was the 6th flood claim on the property.

However when they bought the property they had been told it flooded one time with less than 1 inch of water.

Now this property owner could have a very difficult time selling this property. This is one of the exact situations why Texas created a new property disclosure law in September 2019. After the hurricanes hit Houston many people were not disclosing all the facts and people were buying properties without knowing they had flooded.

As you can imagine if you were a potential buyer you may not buy a property that had flooded before.

Now let's look at another scenario where a realtor disclosed the proper information. The potential home buyer was able to work with FEMA and local flood plain manager to make sure the flood threat was minimized in the future. Even though this property had flooded 10 times before the risk has now been significantly lowered.

As you can see both of these scenarios could have an impact on flood insurance. One could cause claims to continue to be paid out and another could cause claims to be minimized.

You could see why the National Flood Insurance Program is close to broke and why rates can be very high.

Realtors work very hard every day to get properties sold. Many people do not realize that realtors do not get paid if a property does not sell.

So as you can imagine having properties listed in special flood hazard areas can create some significant obstacles.

This is why it's so important to make potential buyers understand what the flood insurance options are and how to minimize the flooding.

We see this in the Homewood Alabama area everyday. This is one of the most desirable areas to live in Birmingham Alabama. However if you don't know what to look for can also be one of the most expensive areas when it comes to flood insurance.

We see people in this area paying more than $5000 every year simply because they did not know how to minimize the flood threat which could help their flood insurance premiums.

So if you have questions about how to minimize the threat of flooding on your property or the flood insurance options, then click here.

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 against flooding.


Homewood Alabama Flood Insurance Options