Should we be aware of Flood Insurance

[jay trotta]

When Tropical Storm Debby came through Pinellas County, Florida in early August, Danielle Jensen thought her home was protected with flood insurance from the National Flood Insurance Program (NFIP). After all, she did spend $8,600 on a policy administered directly by the Federal Emergency Management Agency (FEMA).

But when insurance adjusters came through, they denied her claim outright, not due to any fault of her own. A “prior loss” report discovered that the previous owner filed a flood insurance claim, but did not complete the repairs with the claim payout. From the home’s condition to the serial numbers on the appliances, everything was the same from the previous insurance claim, leaving her family on the hook for close to $100,000 in damages.

Your thoughts on this - assume a mortgaged property

 

[J Grant]

I believe nearly everyone should opt to buy flood insurance. It is reasonably priced - worth it IMO.

 

[ucbruin]

As potential home buyers or as appraisers....

 

[KHS445]

When Tropical Storm Debby came through Pinellas County, Florida in early August, Danielle Jensen thought her home was protected with flood insurance from the National Flood Insurance Program (NFIP). After all, she did spend $8,600 on a policy administered directly by the Federal Emergency Management Agency (FEMA).

But when insurance adjusters came through, they denied her claim outright, not due to any fault of her own. A “prior loss” report discovered that the previous owner filed a flood insurance claim, but did not complete the repairs with the claim payout. From the home’s condition to the serial numbers on the appliances, everything was the same from the previous insurance claim, leaving her family on the hook for close to $100,000 in damages.

Your thoughts on this - assume a mortgaged property

My guess is with the amount of money at stake there will probably be a lawsuit. Ms. Jensen purchased the property and paid the required premium in good faith and FEMA accepted her payment without requiring any sort of inspection. FEMA was negligent in not monitoring the payout of the previous claim to make sure funds were spent as intended.

Does FEMA have a publicly available data base that real estate agents, appraisers, potential buyers can access to see if there has ever been a Flood Insurance claim filed, the amount of the payout, what was to be repaired and any follow up regarding the repairs?

 

[J Grant]

When Tropical Storm Debby came through Pinellas County, Florida in early August, Danielle Jensen thought her home was protected with flood insurance from the National Flood Insurance Program (NFIP). After all, she did spend $8,600 on a policy administered directly by the Federal Emergency Management Agency (FEMA).

But when insurance adjusters came through, they denied her claim outright, not due to any fault of her own. A “prior loss” report discovered that the previous owner filed a flood insurance claim, but did not complete the repairs with the claim payout. From the home’s condition to the serial numbers on the appliances, everything was the same from the previous insurance claim, leaving her family on the hook for close to $100,000 in damages.

Your thoughts on this - assume a mortgaged property

Something was wrong in how this was reported.
Idk the value of her home, but FEMA ( flood insurance ) usually costs in the hundreds, not thousands and there is a limit on how much one can insure anyway ( far as I know on the last )

The $8600 premium was most likely the regular homeowner insurance - either private insurance or insurance from Citizens, the last resort insurer in Florida. A flood insurance policy is a separate and additional policy from FEMA

Imo, insurance agents should do a better job explaining this to homeowners. Normally one can get a FEMA policy through their agent - but it is in addition to their regular

 

[KHS445]

A quick Google search shows that Flood Insurance in Florida averages $677 per year. Granted location and home value will have an impact on the rate, but it is a long way from $8,600.

 

[J Grant]

As potential home buyers or as appraisers....

As an appraiser, I don't get involved with what level of insurance an owner chooses. Some cash buyers or those who paid off their mortgage opt not to have any insurance.

 

[J Grant]

​

About Citizens​

Citizens was created by the Florida Legislature in August 2002 as a not-for-profit, tax-exempt, government entity to provide property insurance to eligible Florida property owners unable to find insurance coverage in the private market. Citizens is funded by policyholder premiums; however, Florida law also requires that Citizens levy assessments on most Florida policyholders if it experiences a deficit in the wake of a particularly devastating storm or series of storms.

Citizens operates according to statutory requirements established by the Florida Legislature and is governed by a board of governors. The board administers a Plan of Operation approved by the Florida Financial Services Commission, an oversight panel made up of the Governor, Chief Financial Officer, Attorney General and Commissioner of Agriculture.

I suspect the owner got their insurance from the above and confused it with FEMA

 

[alebrewer]

When my subject property is located within a designated flood hazard area, I do purposefully have at least two comparable sales with similar locational influence. I don't check for flood insurance, though. Not even sure how you'd do that for comps?

 

[J Grant]

A flood zone means is that a flood is forecast to occur every 25 or 50 or 100 years (or whatever the designation is ) and a house in a flood zone it is usually mandatory they carry flood insurance a FEMA policy which every HO would due well to buy anyway

Unless it looks like being in a flood zone impacts value, I do not search for comps by flood zone- in my experience, buyers purchase where they want to live, and some are fine with it being in a flood zone - close proximity comps, however, maybe in the same flood zone. Imo, the boundaries on the flood map seem arbitrary like the house next door won;t flood because teh line on the map stops there??...( rhetorical question) == houses have can have a lot partially in and partially out of a flood zone (In my state )