FEMA defines a flood plain as “Any land area susceptible to being inundated by floodwaters from any source.” According to FEMA, Floods occur naturally and can happen almost anywhere. Floods can occur away from a body of water. However, river and coastal flooding are two of the most common types of flooding. Heavy rains, abnormally high tides, poor drainage, and even nearby construction projects can put you at risk for flood damage.
FEMA utilizes flood mapping to determine risk of a particular area. These flood maps help mortgage lenders determine insurance requirements. They help communities develop strategies for reducing their risk. The mapping process helps you and your community understand your flood risk. Understanding flood risk helps community leaders make better decisions.
Common Flood Zone Designations
FEMA designates flood zones for coastal mapping. The most common zones are:
X – Area of moderate to low risk flood hazard, usually the area between the limits of the 100‐ year and 500‐year floods. B Zones are also used to designate base floodplains of lesser hazards, such as areas protected by levees from 100‐year flood, or shallow flooding areas with average depths of less than one foot or drainage areas less than 1 square mile.
A- High Risk Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30‐year mortgage. Because detailed analyses are not performed for such areas; no depths or base flood elevations are shown within these zones
AE- High Risk Area, the base floodplain where base flood elevations are provided. AE Zones are now used on new format FIRMs instead of A1‐A30 Zones.
V- High Risk Coastal Area. Coastal areas with a 1% or greater chance of flooding and an additional hazard associated with storm waves. These areas have a 26% chance of flooding over the life of a 30‐year mortgage. No base flood elevations are shown within these zones.
VE- High Risk Coastal Area. Coastal areas with a 1% or greater chance of flooding and an additional hazard associated with storm waves. These areas have a 26% chance of flooding over the life of a 30‐year mortgage. Base flood elevations derived from detailed analyses are shown at selected intervals within these zones.
Flood insurance is generally required if a property is located on an A, AE, V or VE designation. https://msc.fema.gov/portal/home is the link to search a property’s flood designation.
NFIP vs Private Insurance
Most flood insurance is sold through private insurance agencies but is backed by the National Flood Insurance Program (NFIP). The NFIP is a program established decades ago and is backed by the United States Government. The U.S. Government receives a commission for every flood insurance policy sold. These polices were required to obtain a federally backed mortgage on a property that was in a designated flood zone.
In recent years, private insurers have been able to sell flood insurance backed entirely by private companies. NFIP insurance policies still dominate the industry, however, private insurance can be more cost effective.
Ask the Expert
We recently spoke with Jesilyn Scheller, a licensed insurance agent with Green Insurance. Jesilyn is also a licensed realtor with Keller Williams Ocean Living. We spoke with Jesilyn about the advantages of private flood insurance. We asked Jesilyn some of her secrets for obtaining the best and cheapest flood insurance for her clients.
How do I get the best rate?
One of Jesilyn’s secrets getting the BEST flood insurance rate is obtain a copy of the elevation certificate. An elevation certificate is a document prepared by a quailified engineer / surveyor which provides information on the elevation of a building relative to mean high tide, building type, flood map location, and additional information used to determine the proper flood insurance premium rates for a property.
The elevation certificate is needed to obtain your flood risk and insurance costs. Jesilyn loves saving her clients hard earned money! She further explained most homeowners already residing in flood zones have elevation certificates on file with their local jurisdiction. This allows the homebuyer to use the elevation certificate on file. If a elevation certificate is on file, normally, the homebuyer doesn’t have to pay for a new elevation certificate.
What about new homes?
Jesilyn told us when her clients build a new home in a flood zone, she highly recommends her client order an elevation certificate at the time the survey is ordered.
The elevation certificate cost is a one time fee. Jesilyn stated most of the time the benefit of having an elevation certificate outweighs the costs of ordering one because having an accurate elevation can save the homebuyer flood insurance costs.
Unhappy with your flood insurance?
Jesilyn informs her clients if they are unhappy with their flood insurance, they aren’t locked into one program. Clients can switch between federal and private insurance.
Recent Changes to Flood Insurance
Jesilyn said there have been recent changes to the flood rates. One major change is past flood claims. Prior flood losses over $50,000 will affect the premium of the insurance.
The other major difference is in the past some mortgage companies did not accept private flood insurance. Now all mortgage companies are required to accept private flood insurance.
Major Difference in Policy Coverages and Price
Jesilyn told us that federal flood insurance coverage has maximum limits. The maximum coverage limit for federal flood insurance is $250,000 in coverage for the dwelling and $150,000 for the contents of the dwelling.
Private Flood Insurance coverage is more extensive. If her clients are concerned about coverage, Jesilyn advises private insurance policies will allow homeowners to insure the full replacement value of the home and contents. Here is the big difference, Jesilyn told us most of the time this extended coverage is the SAME PRICE….. OR CHEAPER!!!! then limited federal flood insurance.
Jesilyn told us about past clients she represented two years ago at the start of the real estate buying boom. She negotiated a winning offer on a home in a desirable shore community in Ocean County, NJ. The home was mapped on a AE flood zone. It was at the top of her client’s budget.
Jesilyn directed her clients to obtain the elevation certificate. After her clients obtained the elevation certificate, Jesilyn crunched the numbers…… she was able to save her clients hundreds of dollars a year by insuring the home with private flood insurance ….. the best part…..
THE CHEAPER PRIVATE FLOOD INSURANCE JESILYN OBTAINED PROVIDED MORE COVERAGE THEN THE FEDERAL COVERAGE QUOTE…..
HER CLIENTS WERE HAPPIER SAVING HUNDREDS OF DOLLARS A YEAR WITH BETTER COVERAGE!!
About the Expert
Jesilyn Scheller is a licensed real estate agent with Keller Williams Realty Ocean Living. She is a Jersey Shore native and a licensed insurance agent. She is part of the JNR Real Estate Group at her Keller Williams Office. JNR Real Estate group’s mission is to ensure every transaction is timely and as smooth as possible.
Jesilyn also specializes in providing private flood insurance through Green Insurance Agency in Point Pleasant NJ. Contact if you are interested in listing a property, purchasing a property, need home insurance or want a private flood home insurance quote. Her contact number is (732) 644-3713 and email address is email@example.com.
If you are in need of a home inspection in New Jersey, contact Fidelity Home Inspections for all your home inspection needs 609 337 6167