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Should we be aware of Flood Insurance

The thing is, houses in non-food zones can get flooded too, and those are the folks who often do not have insurance. It is a fallacy to believe only houses in flood zones get flooded and at least they are made to carry a FEMA policy for it
True. Problem is, at least its my understanding, is that you can't buy FEMA flood insurance unless you are in a flood zone.

We had 9" of rain in 2 hours about 30 yrs ago in this area. A lot of houses got flooded that weren't in designated flood zones and they were screwed. HO insurance didn't cover the damage. This was a freak occurrence; nothing similar in recorded history in this area. People still got wet.


... at least people who live in flood zones are required to carry a FEMA policy to make them whole after a loss.
Required by the mortgage companies. No mortgage...its optional.
 
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The thing is, houses in non-flood zones can get flooded too, and those are the folks who often do not have insurance. It is a fallacy to believe only houses in flood zones get flooded and at least people who live in flood zones are required to carry a FEMA policy to make them whole after a loss.
I do not believe it covers 100% of the damage, only what the policy limits are.
 
True. Problem is, at least its my understanding, is that you can't buy FEMA flood insurance unless you are in a flood zone.

We had 9" of rain in 2 hours about 30 yrs ago in this area. A lot of houses got flooded that weren't in designated flood zones and they were screwed. HO insurance didn't cover the damage. This was a freak occurrence; nothing similar in recorded history in this area. People still got wet.



Required by the mortgage companies. No mortgage...its optional.
i know from personal experience you absolutely can buy a FEMA policy without living in a flood zone

True those without a mortgage do not need to buy it as a requirement if they live in a flood zone at least for their mortgage -
 
i know from personal experience you absolutely can buy a FEMA policy without living in a flood zone

True those without a mortgage do not need to buy it as a requirement if they live in a flood zone at least for their mortgage -
Just looked it up. I was thinking about some small towns in this area that don't participate in the Program. You can't buy flood ins if your community doesn't participate in the National Flood Insurance Program. Don't know why but some towns/areas don't participate. The flood maps just show a large, blank box over the towns. Maybe some private providers will sell it to you but not FEMA.
 
Private agents can sell FEMA policies.
 
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?
8250.00 is net present value for an investment of $600 over a period of 30 years (amortized loan schedule), with a discount rate of 6%.
Would you not consider that in your offer to purchase?
No different than say, the property will need a roof soon. You offer less........
 
There’s an incredibly risky two-pronged trend in the housing market. Insurance companies are refusing to cover properties because they’re located in severe weather zones or because the housing stock is old. And banks won’t give you a mortgage because of the same risk. The outcome is a further divided housing market—traditional homes that can be insured and mortgaged and a burgeoning segment of properties that can only be sold for cash and at a deep discount, if at all.

An estimated $1.6 trillion in property value of uninsured homes was at risk three years ago and 6.1 million homeowners were uninsured, concluded a report published this year from the Consumer Federation of America. It’s only grown worse since then, even if that is the most recent data available. And yet, such homes can still sell. According to Axios, “uninsurable homes still change hands on the housing market.” You can’t take a mortgage out on them, but you can pay all-cash, and probably receive a steep discount, the publication reported.

I don’t have to tell you how much of a risk it is to have an uninsured property. It may be less so if you’re a billionaire who wants a stunning view and has cash to burn. But for typical Americans living in California, Florida, Texas, or other states vulnerable to severe weather, not so much. More often than not, these are low-valued homes and low-income households that go uninsured. They may choose to go without insurance if they can’t afford rapidly rising premiums or if they simply can’t find an insurer to cover them. Even so, places such as California and Florida have their own last resort forms of coverage, whether it be the FAIR Plan for the former and Citizens for the latter.

What you need to know is there’s an insurance crisis unraveling across the country, especially in those states mentioned above. In California, property insurers are capping the number of policies they write or refusing to write new ones. In Florida, multiple home insurers have fled the state. Insurance woes have made it much harder for homeowners and homebuyers dealing with skyhigh prices and mortgage rates.

The president of CoreLogic’s global insurance solutions business, Garret Gray, once told me his house in a Los Angeles canyon was nearly uninsurable. “It’s got a really bad CoreLogic fire score,” he said. He almost backed out of the deal before he made some changes to make the home insurable. The thing is, some people might not back out of the deal. Instead, they might attempt to get a better deal from the seller.
 
8250.00 is net present value for an investment of $600 over a period of 30 years (amortized loan schedule), with a discount rate of 6%.
Would you not consider that in your offer to purchase?
No different than say, the property will need a roof soon. You offer less........
If I saw a measurable discount in the market for homes in a flood zone I;d adjust because I saw it in the sale prices, not because of a formula -(though i appreciate your posting it)

A roof is very expensive - 20k for a small house and 40k -100k and higher for a bigger house. An extra $600 a year IMO is noise, - but there may be other stigma or reasons houses sell for less in a flood zone -
 
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A roof is the LAST thing you worry about in a flood. :LOL:
 
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