Flood Zone Determinations
Every property is in a flood zone. It is the flood hazard area designation that drives whether or not flood insurance will be required to get a mortgage. If your property is in Flood Zone X, flood insurance will not be required.
Flood hazard areas identified on the Flood Insurance Rate Map are identified as a Special Flood Hazard Area (SFHA). SFHA are defined as the area that will be inundated by the flood event having a 1-percent chance of being equaled or exceeded in any given year. The 1-percent annual chance flood is also referred to as the base flood or 100-year flood. SFHAs are labeled as Zone A, Zone AO, Zone AH, Zones A1-A30, Zone AE, Zone A99, Zone AR, Zone AR/AE, Zone AR/AO, Zone AR/A1-A30, Zone AR/A, Zone V, Zone VE, and Zones V1-V30. Moderate flood hazard areas, labeled Zone B or Zone X (shaded) are also shown on the FIRM, and are the areas between the limits of the base flood and the 0.2-percent-annual-chance (or 500-year) flood. The areas of minimal flood hazard, which are the areas outside the SFHA and higher than the elevation of the 0.2-percent-annual-chance flood, are labeled Zone C or Zone X.
|Special Flood Hazard Areas – High Risk|
|Special Flood Hazard Areas represent the area subject to inundation by 1-percent-annual chance flood. Structures located within the SFHA have a 26-percent chance of flooding during the life of a standard 30-year mortgage. Federal floodplain management regulations and mandatory flood insurance purchase requirements apply in these zones.|
|Coastal High Hazard Areas – High Risk|
|Coastal High Hazard Areas (CHHA) represent the area subject to inundation by 1-percent-annual chance flood, extending from offshore to the inland limit of a primary front al dune along an open coast and any other area subject to high velocity wave action from storms or seismic sources. Structures located within the CHHA have a 26-percent chance of flooding during the life of a standard 30-year mortgage. Federal floodplain management regulations and mandatory purchase requirements apply in these zones.|
|Moderate and Minimal Risk Areas|
|Areas of moderate or minimal hazard are studied based upon the principal source of flood in the area. However, buildings in these zones could be flooded by severe, concentrated rainfall coupled with inadequate local drainage systems. Local stormwater drainage systems are not normally considered in a community’s flood insurance study. The failure of a local drainage system can create areas of high flood risk within these zones. Flood insurance is available in participating communities, but is not required by regulation in these zones. Nearly 25-percent of all flood claims filed are for structures located within these zones.|
|Undetermined Risk Areas|
What Does Flood Insurance Cover?
A residential flood insurance policy coverage is divided into four sub categories:
- Dwelling coverage
- Other structures coverage- for example free standing out buildings, like a detached garage, tool shed or barn
- Personal Property coverage- for the actual items in your house that might be damaged, like furniture, electronics, etc.
- Loss of use- this coverage allows you some money to pay for a temporary place to live.
When somebody purchases an insurance policy, one of the basic questions they ask is what will be covered under said policy. So, what does flood insurance cover, exactly?
Flood insurance differs from your regular homeowner’s insurance policy. Flood insurance is considered a part of catastrophic insurance. Catastrophic Insurance is coverage provided for more rare and higher destruction events such as flooding, earthquakes, hurricanes or volcanic eruptions. These disasters are known as perils in the insurance industry. Your homeowner’s insurance policy usually does not cover perils
Is Flood Insurance Effectively Immediately?
National Flood Insurance Program (NFIP) flood insurance is usually not effective immediately. Most policies have a 30-day waiting period before they go into effect, but FEMA does have exceptions, including:
- If the building is newly designated in the high-risk Special Flood Hazard Area and you purchase flood insurance within 13 months of a flood map revision, the waiting period is reduced to one day.
- If the flood insurance is purchased when making, increasing, extending or renewing your mortgage, there is no waiting period.
- If you select “additional insurance” as an option on your insurance policy renewal, there is no waiting period.
- If the property is affected by flooding on burned federal land and the policy is purchased within 60 days of the fire-containment period, the waiting period may be waived at the time of a claim.
Should I get Flood Insurance?
Should you get flood insurance? YES! Why? I’m in Flood Zone X! Your home will most likely be the largest investment you make in your life! Protect your investment!
Kara Davis of Crew Lending will help you with all of your residential lending needs. She is a leading provider of mortgages in Lake Charles, Sulphur, Westlake and the entirety of Louisiana. She can also lend in 47 other states. Remember that customer service is key in the mortgage lending process. Kara Davis will help you understand the loan process. For more information call Kara Davis at 337-842-0115.