Should we be aware of Flood Insurance

[alebrewer]

Does the requirement to purchase flood hazard insurance (which is a requirement if the homeowner uses a loan to secure financing) have an effect on value? In my market(s) it does - usually roughly the present value of the future flood insurance payments.

 

[Zephyr999]

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?

My understanding is no mortgage, no flood insurance requirement.

 

[alebrewer]

My understanding is no mortgage, no flood insurance requirement.

Mine as well

 

[J Grant]

Does the requirement to purchase flood hazard insurance (which is a requirement if the homeowner uses a loan to secure financing) have an effect on value? In my market(s) it does - usually roughly the present value of the future flood insurance payments.

FEMA flood insurance is usually under $1000 a year, avg policy in FL $400- $650, idk why that would impact value. I think the real impact might be if residents in flood zones have problems buying regular policies if insurers shun those areas or charge more for the policies?

 

[alebrewer]

FEMA flood insurance is usually under $1000 a year, avg policy in FL $400- $650, idk why that would impact value. I think the real impact might be if residents in flood zones have problems buying regular policies if insurers shun those areas or charge more for the policies?

There are several reasons value could be impacted by location in a flood zone. There is the present value of the flood payments, there is the possibility of losing one's home and possessions, erosion, etc. I can't speak for any market but my one, but in my market, homes in flood zones typically command between 2 and 5% less than homes not. Of course, one would have to actually do the analysis to make that determination.

 

[Terrel L. Shields]

If it had a prior claim why did the prior owner not replace the appliances as per the claim? If I drive around with a bent fender after being paid to fix that fender the insurance company isn't going to fix it again if I have another wreck.

 

[Larry Phillips]

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

Perhaps we should include a disclaimer regarding whether Flood Insurance will pay?

 

[alebrewer]

I certainly think there would be a significant detriment to market value if the buying public knew FEMA would deny claims for a specific home...

 

[J Grant]

Perhaps we should include a disclaimer regarding whether Flood Insurance will pay?

why would an appraiser want to make such a statement or get involved in future insurance claims?? Good way to get sued

 

[jay trotta]

How would anyone know the details of a "Claims Made" and the disclosure of what was paid for (the insurance breakdown) ?

just curious