Helping your clients understand flood risk is essential to ensuring they are ready to handle imminent dangers. People looking for a home or planning an addition should always consider getting excess flood insurance. Even areas that aren’t traditionally prone to flooding are at risk for floods. According to the Federal Emergency Management Agency (FEMA), even moderate or low-risk areas are five times more likely to experience flooding than a fire in the next 30 years.
A Bloomberg report states that no city is entirely floodproof and that ensuring total protection against floods is next to impossible. For example, floodproofing a city like New York would require multiplying sewage system capacity and other large-scale efforts. What we can do instead is to prepare for the worst and try to minimize the effects of these disasters.
What Determine’s a Home’s Flood Risk?
Understanding flood risk requires awareness and knowledge of causes and mitigating factors. Inspecting a particular area’s flood maps can be very informative. These maps show flood zones that describe flood risk levels on land, flood plain boundaries, and base flood elevation, predicting how high flood waters could rise. Each of these factors contributes to a property’s flooding risk.
You can find local flood maps through the FEMA Map Service Center at your local government office, courthouse, or library. You could also speak to your local officials about flood risk projects in your community. These are typically cooperative efforts between FEMA and local, state, or federal partners to identify high-risk areas and implement measures to reduce these risks.
Tips for Helping Your Clients Understand Flood Risk
There are plenty of ways to help your clients understand flood risk. Here are steps you can take to assist your customers.
Do your Research
Every state has its own flood disclosure laws. Many states don’t require property sellers to share flood history information with buyers, so you might have to research. When sharing the flood history of residential property, some states may require sellers to share flooding or leakage issues they’ve experienced, while others have no such requirements.
Even in states where mandated disclosure, sellers may not be subject to full transparency. Some states require sellers to disclose information on flooding risk but do not require them to disclose previous flood damage or whether they are required to obtain flood insurance. In addition to researching the property, you should coordinate with real estate professionals to better understand the property’s flood risk.
Learn the Probability of Experiencing a Flood
Flood zones have a definition, and experts define them as 25-, 50-, or 100-year zones. Understanding those terms is essential for understanding flood risk in a particular area.
A property designated as a 100-year flood zone won’t necessarily experience a flood once every 100 years. According to FEMA, a house in a 100-year flood zone has a 1% chance of flooding during any given year.
But despite this relatively low risk, any area where rain falls can experience a flood. It is necessary to purchase flood insurance even if the property isn’t in a high-risk zone.
Furthermore, FloodSmart.gov also says that a property’s flood risk may change over time due to factors such as development. Therefore, a home at low or moderate risk of flooding now could be at high risk in the future.
Know What to Expect when Purchasing in a High-Risk Flood Zone
A homeowner in a high-risk zone will almost certainly have to purchase flood insurance. As a local insurance agent, you should help your clients determine which type of flooding insurance is most helpful and how much it would cost.
Excess flood insurance is a private flood insurance policy that extends your client’s coverage beyond the government’s National Flood Insurance Program limits. The NFIP covers about $250,000 worth of flood damage. If homeowners’ homes cost more to rebuild than the NFIP limit, excess flood insurance will come in handy.
Your clients should also know that a new policy won’t take effect until 30 days after purchase. Therefore, they should get insurance long before the storm season to ensure they are adequately covered.
About Snyder Specialty
Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039.
