It can be disturbing to realize that the beautiful home you’ve fallen in love with is in a flood zone. While it’s not necessarily a deal-breaker, there are some serious considerations to understand before moving forward.
Flood zones are defined by the Federal Emergency Management Agency (FEMA) and are categorized according to the level of risk. A high-risk area is defined as having a 1+% chance of annual flooding, whereas a low-to-moderate location has a 0.2% or less chance of annual flooding.
FEMA maintains a flood map center where you can research the classification of the location and the level of concern. Zones labeled A and V are the highest risk zones. These are areas that are either coastal or riverside communities. These Special Flood Hazard Areas will have to carry flood insurance and have a 25% chance of serious flooding in a 30-year time frame. Zones labeled B, C, and X are lower risk.
Flood insurance is available to homeowners in any location. It makes sense that homes located in high-risk areas will pay higher premiums than those in lower-risk zones. In addition to normal homeowner’s insurance, flood insurance can range from a few hundred a year to thousands per year. The good news is that proper flood insurance provides excellent coverage in the event of damage, even providing temporary housing if necessary. Coverages vary, so it’s important to discuss the options with your insurance agent.
There is no reason to dismiss a home simply because it’s located in a flood zone. Many beautiful locations are also considered high-risk. But before you write the offer, it’s important to consider all the implications and costs involved.