In the year since Hurricane Harvey devastated the Texas and Louisiana coasts, homeowners have had to reconsider the way they think about flooding. Thousands suffered evacuation from over 200,000 homes across the region, three-fourths of which lived outside of the existing 100-year floodplains. What did most of these property owners have in common? No flood insurance.
Doesn't my homeowners insurance cover flooding?
The long and short answer to this question is no. House Logic, a division of NAR, described homeowners insurance in this way when it comes to water coverage in your home, "[Homeowners insurance] only covers water falling from the sky. Once water touches the ground and enters your home, it’s a flood, and only flood insurance will pay for the damage."
Now, if a branch falls on your house resulting in water damage in your home then this is most likely covered by your existing homeowner’s policy. However, if your property experiences flooding from a rain-swollen creek or river flowing onto your property or water enters the home due to poor drainage then your insurance carrier has the unfortunate task of informing you of your proverbial creek-without-a-paddle status.
FEMA's general definition of a flood is as follows, "a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow."
How do I know if my property is in a flood zone?
Do your due diligence and contact your homeowner policy carrier for more details. FEMA is tasked with maintaining up-to-date (as much as possible, anyway) flood zone maps to make this process easier to determine for everyday folks. You can access the interactive map here to determine your proximity to a flood zone. The City of Austin also offers regional flood map and statistical information on their FloodPro site.
When you are buying a home, many times the lender will order a flood zone certification to make sure the contracted property is not currently in recognized flooding areas. If it is determined that the property is indeed in a flood zone then that lender can require that you purchase flood insurance as a condition of your loan. No bank wants to give you $300,000 for a home in danger of washing out in the next heavy rain incident.
It’s important to consider two crucial facts when considering flood insurance for your home. Remember, three-fourths of the 200,000+ homes that were severely damaged in Houston and the surrounding areas were not in designated flood zone areas. For example, parts of Kingwood, TX were completely submerged from the massive amounts of water being released from dams bursting with runoff from other parts of the state. When those floodgates opened the overly saturated ground had nowhere for the water to go. Despite being almost 100 miles from the coast, whole neighborhoods were literally submerged. Second, according to FEMA, more than 20% of annual flood claims come from areas designated as Low to Moderate Risk Zones.
How much does flood insurance cost?
If your property is not oriented in a designated flood zone then flood insurance can be quite inexpensive. We’re talking ~$10.00 a month or around $130.00 a year for basic coverage. However, if you do find that you are in a flood-prone zone or are looking at a property situated in one then insurance rates can vary dramatically. This is another reason why working with an experienced real estate agent can save you thousands of dollars on your home. Not only can they steer you toward safer investments but they can recommend quality professionals to assist you once you’ve chosen your new happy home.