Anyone have any experience with flood insurance?

[aprilchem]

Wondering if anyone has experience with purchasing flood insurance on a second home (or first home - not sure if that part really matters to insurers).

We are looking to by a 2nd home that will be waterfront (on a bay). We've figured out how you tell whether a house is in a designated flood zone, but we have no experience with purchasing flood insurance. FEMA says the average cost is $800 year but varies with home size and cost, but gives no further information. This home will be on the low size of cost and fairly small (1000 square feet).

Anyone ever buy flood insurance like this? Mostly I'm interested in whether you need to shop around (not sure whether insurance companies compete), what the approximately real-life cost is, etc. It also appears that you might be able to buy insurance directly from FEMA? Anyone know if that's true?

 

[mnrose]

I would suggest talking to your insurer, or an insurance broker in your area. This is all going to be very community specific. I had to have flood insurance once because my home was in a designated flood area, and my mortgage banker required it. It was very expensive, adding over 75% to the cost of my annual policy. Like I say, your best bet would be asking your current broker or company.

 

[Southernmiss]

I just bought flood insurance through our home owners broker. There was no negotiating. It seems that it is a flat rate set based on circumstances by the National Flood Insurance Program.

We are not in a designated flood zone area. But due to construction near us, the water flow in heavy rains has changed and we had a scare 2 years ago. We bought it to be safe than sorry.

Our policy for a 2100 square foot home is about $430 per year.

 

[AlohaNow]

There is no competition in the flood insurance market. The cost will solely be based on the location and size of the property. A few years ago we went through The Hartford Company for our primary residence in Maryland. The year after Hurricane Isabel came through our premium doubled. I'm so glad we do not need flood insurance on our current home!

 

[hereyago]

After Hurricane Isabel came through our premium doubled. I'm so glad we do not need flood insurance on our current home!

Ugh, Isabel was a ......

 

[tex1989]

I could write a book on Flood insurance and it would not be a very nice one. If you get your Flood Insurance through the Fed's and FEMA the cost is set and there is no shopping to be done. There are however companies that will write Flood insurance that are "for profit" companies. You will know right away because the quote is considerably higher than what you would pay through the Feds. Now I am all about being prudent and having insurance for worst case scenarios but at some point I start being opposed to Federally subsidized insurance that allows poor choices. By poor choices I am say people building in areas where they should basically not build. My primary residence is 30 miles from the Gulf of Mexico in the greater Houston area. I am not in a 100 year flood plane but FEMA says the street in front of me is. House is 8 feet above the street. I have gone back and forth with them about what zone I am in because they say I am street level, I say I am not. The difference? I can get flood insurance (subsidized) at the elevation I claim. I cannot get flood insurance through them at the level they claim. All this after 50 inches of rain during Hurricane Harvey when my house and our entire neighborhood did not flood. Now add to this that we are in a coastal county Brazoria and as a result no one will write insurance for our county so I am forced to purchase TWIA (Texas Windstorm Insurance Agency). This puts me in the same coverage pool at the same rate as the braintrust that decided to build a place in Galveston called Beachtown. After the devastating hurricane of 1900 the raised Galveston almost 20 feet and built a seawall of 20 feet to protect the island and its residents. The braintrust that is Beachtown said hey I have an idea, since there is a significant jetty protecting the channel into Galveston and the Houston Ship Channel on one end of the island and since tides and winds over the course of 100 years have built up a nice land mass, lets build houses here. Houses on the coast facing the Gulf of Mexico (otherwise known as hurricane alley) with no protection. But guess what insurance is the same you would pay for a house 30 miles inland that is 42 feet above sea level because you are in a governmental subsidized pool and by the way we will throw Federal Flood insurance in while we are at it, what a deal!

My opinion you own a $500,000 house on the beach in a hurricane prone area and the actuary table says high odds of a devastaing storm every 10 years then your premium is $50,000 a year, simple math.

 

[mnrose]

I could write a book on Flood insurance and it would not be a very nice one. If you get your Flood Insurance through the Fed's and FEMA the cost is set and there is no shopping to be done. There are however companies that will write Flood insurance that are "for profit" companies. You will know right away because the quote is considerably higher than what you would pay through the Feds. Now I am all about being prudent and having insurance for worst case scenarios but at some point I start being opposed to Federally subsidized insurance that allows poor choices. By poor choices I am say people building in areas where they should basically not build. My primary residence is 30 miles from the Gulf of Mexico in the greater Houston area. I am not in a 100 year flood plane but FEMA says the street in front of me is. House is 8 feet above the street. I have gone back and forth with them about what zone I am in because they say I am street level, I say I am not. The difference? I can get flood insurance (subsidized) at the elevation I claim. I cannot get flood insurance through them at the level they claim. All this after 50 inches of rain during Hurricane Harvey when my house and our entire neighborhood did not flood. Now add to this that we are in a coastal county Brazoria and as a result no one will write insurance for our county so I am forced to purchase TWIA (Texas Windstorm Insurance Agency). This puts me in the same coverage pool at the same rate as the braintrust that decided to build a place in Galveston called Beachtown. After the devastating hurricane of 1900 the raised Galveston almost 20 feet and built a seawall of 20 feet to protect the island and its residents. The braintrust that is Beachtown said hey I have an idea, since there is a significant jetty protecting the channel into Galveston and the Houston Ship Channel on one end of the island and since tides and winds over the course of 100 years have built up a nice land mass, lets build houses here. Houses on the coast facing the Gulf of Mexico (otherwise known as hurricane alley) with no protection. But guess what insurance is the same you would pay for a house 30 miles inland that is 42 feet above sea level because you are in a governmental subsidized pool and by the way we will throw Federal Flood insurance in while we are at it, what a deal!

My opinion you own a $500,000 house on the beach in a hurricane prone area and the actuary table says high odds of a devastaing storm every 10 years then your premium is $50,000 a year, simple math.

I tend to agree with this. I do not know why we permit people to continually rebuild in areas that flood. Makes no sense whatsoever. I'm in favor of federal disaster insurance, but not multiple times! I'd say after one claim, sorry, we (the taxpayers) aren't going to pay for you to rebuild again. Pay to move you, yes. Pay so you can rebuild in a spot that will flood again, uh, no.

By the way, flood insurance is the ONLY natural disaster where the federal government offers insurance. You can't buy earthquake or landslide insurance subsidized by the federal government, nor can you buy federally subsidized tornado insurance. In those cases (well except landslides, no one insure against that), you CAN buy insurance but at market rates. Seems like that should be the same for floods. Buy in a flood zone, it's a risk you take.