Flood Insurance policies are sold independently. Floods can occur almost anywhere at anytime, not just near water. Your home has a 26 percent chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance of fire. Floods are the #1 natural disaster in the United States. Floods have caused nearly $1.6 million in Alaska and $23.8 billion in U.S. in the last 10 years.
Coverage is available for residential, commercial buildings and renters’ personal items. There is coverage available up to $250,000 for single-family, multi-family and other residential buildings and up to $100,000 for contents coverage. Non-residential buildings, including small businesses can acquire coverage up to $500,000 for the building and $500,000 for contents. Only flood insurance protects your most important financial asset, your home and your personal property, from floods.
“Lender Placed” is when the lender determines the home is not adequately covered and therefore places coverage to meet the loan requirements. It could cost you 3 to 4 times more for a lender placed policy, than if acquired on your own with the help of an insurance agent. Lender placed coverage only protects the Lender’s interest, not necessarily your interests. Flood Insurance purchased in connection to a mortgage does not have a 30-day waiting period. Lenders will notify borrowers if Flood Insurance is required as a condition of the mortgage loan (National Flood Insurance Reform Act of 1994). Flood Insurance is mandatory if the lender is federally regulated and your home is located in a Special Hazard Area.
Is your home in a Special Hazard Area? This is an area with the highest risk of flooding. Flood Insurance Rate Maps show high risk areas as Zones A, AE or V. Nearly 25 percent of all Flood claims come from medium or low-risk flood areas, Zones B, C and X. Anyone can purchase Flood Insurance with out being in a Special Hazard Area.
If you have Flood Insurance and are selling your home, you can assign your current Flood Insurance policy to the new owners at the time of closing.
A Flood Elevation Certificate is necessary before flood premiums can be determined. The certificate is to be completed by a Licensed Land Surveyor, or Professional Engineer who is authorized by law to certify elevation information. The participating community will require an owner to obtain a floodplain permit before building.
This permit is issued by the community office and requires property owners to build above the base flood elevation. Completed Flood Elevation certificates should be kept on file with the community office as required by NFIP regulation 44 CFR 60.3b1, FEMA 480 Publication and the local flood reduction ordinance for the community.
On new construction, it’s easy to check with the Department of Community Planning to determine your flood zone. If your building site is located in a Special Hazard Area, it would be wise to have a land surveyor, engineer, or architect come out and set a temporary benchmark before construction begins. This will allow the builder to refer to the benchmark and build above the base flood elevation (BFE) and will help you determine how much fill material is needed to raise your home above the BFE, resulting in lower Flood Insurance costs. Since building your home above the BFE allows for lower Flood Insurance premiums; building below the BFE will have higher premiums.
Lower Flood Insurance premiums are available to property owners that build above the BFE and do not have a basement or crawlspace. Building a home that has a basement or crawlspace requires flood openings in the foundation. These are openings on all sides of the basement or crawlspace walls and allow the flood waters to flow freely through the space without building up hydrostatic pressure.
The NFIP (National Flood Insurance Program) is the main source for Flood Insurance in the United States. Flood Insurance is available through about 90 insurance companies in more than 20,300 participating communities nationwide to renters, business owners and homeowners.
Applying for Flood Insurance is easy; your agent will require a Flood Elevation Certificate, which will have the necessary information to rate the policy. The premium charged for an accurately rated NFIP policy will be the same, regardless of whom you purchase the policy through. For more information on rates, premiums or maps contact your local Independent Insurance agent.
All information provided in this article was obtained from the following websites www.fema.gov or www.floodsmart.gov. For more information call Taunnie Boothby with Division of Community and Regional Affairs at 907-269-4583 or taunnie.boothby@alaska.gov.
Micheline Patterson
Kenneth Murray Insurance
Personal Lines Agent
300 Barnette St, FBKS, AK 99701
P O Box 71007, FBKS, AK 99707
Phone 907-456-6646
Fax 907-452-5445