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How Much Flood Insurance To Get
May. 16th, 2007 06:26 pmFloods are common but insurance against floods is not included in regular homeowner insurance.
If you are within a 100-year flood plain and you buy your house on credit, your lender will insist that you buy flood insurance, and it will be expensive.
If you are not within this boundary (as determined by FEMA), then the insurance is much cheaper. To find out how risky an address is, check out the National Flood Insurance Program's risk assessment tool.
I once found a flood map and it showed that the entire apartment complex behind my house is in a 100-year flood plain. The boundary is basically my back fence. I'm betting that boundary was determined before anything was built here, and whoever built the houses in my subdivision deliberately stayed out of the flood plain, but then some more greedy folks built an apartment complex right in the middle of it. There is even a building that is straddling the creek!
So, now that this area is loaded with impermeable cover, and given that my property is flat, I'm thinking that I am at risk. Surely if those apartments flood, my house will flood, too.
I tried the tool above and I got some fascinating results. First I get this lovely chart:
Then I get this surfer house graphic:
Then I get the following message in large letters: "You live in or near a Special Flood Hazard Area!" I'm special!
But then a paragraph explains "This property is located in a high risk flood area. Your property may be located inland, in a low-lying area near creeks and rivers that are prone to flooding caused by torrential rains, spring melt, etc. Or your property may be located in or near a coastal area that is susceptible to flooding caused by storm surge, hurricanes, etc." I have the torrential rain next to creeks kind. And it sounds like the boundaries may have been updated to include me since I saw that map.
In the future, I will be checking this site before I buy a house.
Meanwhile, I'll be renewing my flood insurance.
What I can't decide is how much to renew it for. The renewal form gives me a choice between renewing it for the same as last year ($125,000 for the building; $50,000 for the contents) at the annual rate of $249, or I could increase the coverage to $150,000 for the building and $60,000 for the contents for $264.
My research attempts have led to the common advice to insure it for the amount it would cost to rebuild. How do you find out how much this is? You could ask your agent, but I've read that they don't really know and that some program a bunch of them were using was underestimating the amount.
Okay, so then when I research how to find out how much it would cost to rebuild, I keep coming across the following three pieces of advice:
* whatever you do, don't use an appraisal to estimate this cost
* don't try to guess based on an amount per square foot because that amount is too imprecise
* hire a contractor to tell you
What? Every year I'm going to hire a contractor to estimate the cost of doing something I'm not going to do (at least not yet)? I suspect it would cost less just to go blindly with the higher amount.
Of course every year I get the same two choices: renew at the same level or renew at $25,000 more. If I choose the higher level each time, it could really add up after a few decades.
One strategy is to look at my tax assessor's appraisal which is conveniently split into $100,000 for the building and $40,000 for the land. This implies to me that it might cost $100,000 to build this fabulous building today (given the codes of yesteryear) and the other $40,000 is for the location, location, location. Of course, if they have to tear down the old building first, that would cost a bit more. But then my foundation is a concrete slab, which I'm guessing wouldn't be ruined by flooding, so that would bring the cost back down.
So based on that, the $125,000 should be just fine.
On the other hand, as Katrina reminds us all, if there's flooding, you're not the only one who would like some rebuilding. Demand increases, and with it, prices. In that situation, $150,000 doesn't seem ridiculously high at all. So that's what I've decided to do this year.
(Another strategy is to decide whether the contents are worth closer to $50,000 or $60,000. That sounds even harder!)
**
So, are any of y'all trying that tool? If so, did you get surprising results?
If you are within a 100-year flood plain and you buy your house on credit, your lender will insist that you buy flood insurance, and it will be expensive.
If you are not within this boundary (as determined by FEMA), then the insurance is much cheaper. To find out how risky an address is, check out the National Flood Insurance Program's risk assessment tool.
I once found a flood map and it showed that the entire apartment complex behind my house is in a 100-year flood plain. The boundary is basically my back fence. I'm betting that boundary was determined before anything was built here, and whoever built the houses in my subdivision deliberately stayed out of the flood plain, but then some more greedy folks built an apartment complex right in the middle of it. There is even a building that is straddling the creek!
So, now that this area is loaded with impermeable cover, and given that my property is flat, I'm thinking that I am at risk. Surely if those apartments flood, my house will flood, too.
I tried the tool above and I got some fascinating results. First I get this lovely chart:
Then I get this surfer house graphic:
Then I get the following message in large letters: "You live in or near a Special Flood Hazard Area!" I'm special!
But then a paragraph explains "This property is located in a high risk flood area. Your property may be located inland, in a low-lying area near creeks and rivers that are prone to flooding caused by torrential rains, spring melt, etc. Or your property may be located in or near a coastal area that is susceptible to flooding caused by storm surge, hurricanes, etc." I have the torrential rain next to creeks kind. And it sounds like the boundaries may have been updated to include me since I saw that map.
In the future, I will be checking this site before I buy a house.
Meanwhile, I'll be renewing my flood insurance.
What I can't decide is how much to renew it for. The renewal form gives me a choice between renewing it for the same as last year ($125,000 for the building; $50,000 for the contents) at the annual rate of $249, or I could increase the coverage to $150,000 for the building and $60,000 for the contents for $264.
My research attempts have led to the common advice to insure it for the amount it would cost to rebuild. How do you find out how much this is? You could ask your agent, but I've read that they don't really know and that some program a bunch of them were using was underestimating the amount.
Okay, so then when I research how to find out how much it would cost to rebuild, I keep coming across the following three pieces of advice:
* whatever you do, don't use an appraisal to estimate this cost
* don't try to guess based on an amount per square foot because that amount is too imprecise
* hire a contractor to tell you
What? Every year I'm going to hire a contractor to estimate the cost of doing something I'm not going to do (at least not yet)? I suspect it would cost less just to go blindly with the higher amount.
Of course every year I get the same two choices: renew at the same level or renew at $25,000 more. If I choose the higher level each time, it could really add up after a few decades.
One strategy is to look at my tax assessor's appraisal which is conveniently split into $100,000 for the building and $40,000 for the land. This implies to me that it might cost $100,000 to build this fabulous building today (given the codes of yesteryear) and the other $40,000 is for the location, location, location. Of course, if they have to tear down the old building first, that would cost a bit more. But then my foundation is a concrete slab, which I'm guessing wouldn't be ruined by flooding, so that would bring the cost back down.
So based on that, the $125,000 should be just fine.
On the other hand, as Katrina reminds us all, if there's flooding, you're not the only one who would like some rebuilding. Demand increases, and with it, prices. In that situation, $150,000 doesn't seem ridiculously high at all. So that's what I've decided to do this year.
(Another strategy is to decide whether the contents are worth closer to $50,000 or $60,000. That sounds even harder!)
**
So, are any of y'all trying that tool? If so, did you get surprising results?