We completed a EC for a house that was 1/2 in Zone A1 and half in Zone B. The house was above the BFE for Zone A1. The insurance company he's dealing with said you still need in insurance in Zone A1.
Is this correct or does the insurance company have it wrong?
Thanks
What I have found out and is exactly what I tell my clients is that we measure and follow the rules as we understand them, but once our work is published, then it is out of our control and expertise.
Whoever, how and why that sets insurance rates using our information is above our pay grade.
Randy
Randy has it right, but I would tell the people to use the EC to get the lowest insurance rate possible, but still buy insurance. Being that close means there is risk and they need to be prepared for it.
And BTW - the LAG will be critical in the rating.
Like Dave said, the LAG is the important issue, if you have below ground facilities anyway! You'll need vents etc.
The lender will be the one to determine insurance need, not us 🙂
What I'm wondering is has anyone experienced a property being above the BFE in a flood zone and the still make them purchase flood insurance?
I also let them know its out of our hands once we complete the EC, but seems strange that they are still requiring them to have insurance on this one...
Thanks
Yes, I have had that happen. The regulations say that federally insured lenders must require flood insurance if the structure is in the flood zone, but the lender may require flood insurance even if it isn't. The only thing you can do is tell the client to shop around and they might find a lender who will not require it. But as stated above, never advise a client not to get flood insurance no matter what the circumstances.
I do not give any client advice on whether or not to get flood insurance.
I fill in the blanks on a form, get paid and I am done.
I have no more expertize than that when it comes to Federal Flood Insurance Rates.
They are grown people buying land and its between them and whoever is requiring them to hire me for my services.
10 foot pole comes to mind.
Randy
I don't mind telling people to buy insurance because the burden is then 100% on them. If I give them a form that says they are above BFE or even hint that they don't need insurance, whoa be unto me if they flood. You can be sure the lawsuits will fly my way.
And to answer a question above, I have seen banks require flood insurance if any part of the property is in an "A" zone - even if the house is not.
Dave,
We are not experts on flood insurance, we are experts on filling out forms properly.
Go out on a limb if you want to, but you are the one standing on the limb.
Fill it out properly and my job is done and have no dog in the fight from there.
Randy
I haven't verified this statistic, but have heard it many times in
FEMA seminars - Over the life of a 30yr Mtg. there is a 29% chance of damage
by water and about 7% of damage by fire.
I often throw out this statistic to my client if they are marginally above
the BFE at LAG.
Scott
it doesn't matter that the house is above the BFE, you MUST purchase insurance if you are located in the flood zone...Being above the BFE and other factors such as LAG, flood vents, etc. will determine the RATE you pay.
Me too. My contracts for EC work always include a statement recommending flood insurance no matter what the form or the lender says. This is a good idea because of many factors, including things like water damage from a roof leak even.
Elevation Certificates serves two purposes 1. Community compliance and 2. Rate a flood insurance policy.
The community is required to monitor all new or substantial improvements on structures to make sure it is in compliance with the flood zone and any associated BFE requirement.
If a homeowner has a mortgage the lender will require flood insurance if the structure is located in any zone except B, C or X for the balance of the loan no matter what the elevation is.
If the structure has a mortgage and is in a B, C or X flood insurance is optional.
If the structure doesn't have a mortgage, flood insurance is optional no matter what flood zone it is located in. If it is built after the mid 1970's it is still required to comply with any BFE requirements in affect at the time.
If a structure is located in two different zones the worst case is used to rate the policy for flood insurance and for community compliance.
To answer your question if any part of the structure is in Zone A and there is a mortgage then flood insurance is mandatory.
I usually recommend to a client who is requesting an EC for new construction and is located in a zone A or V to check with their insurance agent about the cost reduction if they build 1 or 2' higher than the BFE. The cost to raise the structure 1' above the BFE is usually paid off in a few years with reduced flood insurance rates. I futher explain being above the required BFE is a big plus when they want to sell their house.
In the past FEMA used to round off to the nearest foot the elevations of structures, so if someone built 0.6' above the BFE they got credit for being a full 1' above.
Yes, I wasn't too clear. You must insurance flood insurance because your lender will require it. If you own it outright, then it is up to you.
