What newcomers need to know about flooding, flood insurance
The Houston area has taken quite a beating over the past several weeks, as rain and flooding have continued to take their toll on the city and its residents.
Unfortunately, many Houstonians have learned the hard way, that although history has a way of repeating itself, it isn’t always reliable. So, just because their home or neighborhood hasn’t fallen victim to flooding in the past, doesn’t mean that they are safe from flooding in the future.
That is why obtaining a flood insurance policy is strongly urged for people who are moving to Houston and buying a home, even if that property is located in a low-risk flood zone.
Ed Wolff, president of Beth Wolff Realtors Real Living, shares both his professional advice and personal experiences with his relocation clients when it comes to the importance of having flood insurance. As a two-time flood victim himself, he knows first-hand what flooding can do to a home.
He said that for people who have been through a flood, that it is the psychological ramifications of that experience that leaves a much deeper and lasting impression than the actual effects on a property’s value in the marketplace. “Houston is a city that is very resilient, and from a property value standpoint, we consistently see, even in neighborhoods that have flooded repeatedly, that value and market memory is substantially shorter than the psychological effects on people who have been through a flood,” said Wolff.
He added that the consistency of the rainfall has prolonged the marketing time for many properties that might have otherwise been sold over the past several weeks.
This is a result of that psychological effect, which he said has instilled some fears in home buyers about the properties and neighborhoods that they might have been considering.
While that fear might have hindered a number of home sales, Wolff said, “Value will rebound and value will come back, and anybody who mitigates their damage will see a return on that investment, but it’s just going to be a matter of time and distance from past, current and future events.”
He said that because no property is im- mune to flooding, he recommends flood insurance for all home buyers and current homeowners and warns his clients against making rash decisions. He tells them to take their time and carefully consider how to best put their homes back together.
Chris Badger, owner of Badger Insurance, said that the recent flooding, compounded by the threat of hurricane season, has many new and current Houston residents taking out flood insurance policies. Ideally, he said that homebuyers should obtain a flood insurance policy when they buy a new home.
“I always tell Realtors that as soon as their clients find a house that they like, that they need to call an insurance agent and have them run a Flood Zone Determination,” Badger said. “This will tell them exactly where the property is mapped, and give them an idea of what the rate is going to be for flood insurance for that location.”
According to Badger, the cost for flood insurance is relatively low when compared to the potential risk posed by flood damage, and the subsequent loss of property and personal belonging.
“For example, if the home is your primary residence, and you are in Flood Zone X, which is the lowest premium zone, you can obtain a preferred risk policy for $450 through FEMA. That covers you for $250,000 on the structure, and $100,000 on contents with a $1,250 deductible per clause. So, if you have a loss that encompasses both sides of the policy, your total out-ofpocket expense will only be $2,500,” Badger said.
He added that FEMA wants to prevent property owners from jumping in and out of policies if they are in lower-risk areas, so there is a 30-day waiting period before a flood insurance policy can go into effect, and the premiums for those policies must be paid in full and in advance each year.
For properties that are in a higher-risk flood zone, home buyers should also be aware that mortgage companies do require flood insurance, and as such the policy would be effective at the time of closing.