What You Need to Know About Flood Insurance.
There is a lot of confusion surrounding the topic of flood insurance. Charleston is part of the Lowcountry and ALL homes in the Charleston area are in a flood zone. Charleston and Berkeley counties are participating communities in the National Flood Insurance Program. Therefore, every home is in a flood zone.There is no such thing as buying a home in Charleston that is "not in a flood zone". Lenders may not require flood insurance on homes in an X flood zone, but the home still sits in a flood plain (the X zone accounts for 25% of all flood claims). The key question when buying a home is -- which flood zone is the home in and how does that affect the flood insurance premium?
Meghan Bowes with Keller Williams Realty and Alicia Maxie with Brown & Brown Insurance teamed up to create this quick video to help answer some of the common questions they get asked daily.
What are the differences in flood policies and how they affected by the different ratings?
- Homes built before 1974: Insurance agents call these homes "Pre-Firm". In this case, an elevation certificate is not required to obtain a flood insurance policy. There are a few instances where having an elevation certificate would help you get a lower rate, however, most of the time an elevation certificate is not necessary.
- Home built after 1974: An elevation certificate is required in order to obtain a flood insurance policy. The current home owner should have an elevation certificate for the home that they can provide to a home buyer. If not, the buyer may be able to assume the sellers current policy OR the buyer can order an elevation certificate. If the seller does not have an elevation certificate and the flood insurance policy is not transferrable, it will be the responsibility of the buyer to order an elevation certificate (typically around $350) to obtain flood insurance.
What about policies for homes that are in a non-high-hazard flood zones?
- Homes in a low flood hazard zone would be in an X zone. These policies are not required and are not escrowed with your home owners insurance. It is still HIGHLY recommended to obtain a flood insurance policy, since we are in the lowcountry. These policies are typically around $450 per year for up to $250,000 worth of coverage, including contents coverage.
What changes can we expect in the near future?
- FEMA typically increases the annual premiums about 10-15% per year. This year, as of April 2017, we are really going to see a hit on investment properties built before 1974. This includes rental properties and homes that are not a primary residence. These premiums are expected to increase about 25%.
Do you have more questions?
To learn more about flood zones and flood insurance, contact:
Commercial and Personal Insurance Advisor
Brown & Brown Insurance of SC, Inc
To learn more about the Charleston area and homes for sale, contact:
Realtor, Buyer Specialist
The Alan Donald Team
Keller Williams Realty