How Will Living in a Flood Zone Impact You in Southern California?

Belmont Shore Flood Zone Area (some
properties may have been revised per specific
elevation studies)

Let's take Belmont Shore in Long Beach as a sample area which is officially designed by FEMA to be in a flood zone as shown on the map.

This is not the only affected area of Long Beach which also include the Alamitos Bay area, areas along the flood channel in Wrigley on the west side, etc., so a homeowner should look at maps at the link at the bottom of this article.

By clicking on the map a larger view will be seen, along with the names of the flood zones.  FEMA's description of the flood zones are found on their site.  Also, by going to their site, the viewer can find his/her particular neighborhood.

What does this mean for the property owner?  First of all, if you buy a home with a federally insured mortgage, you will be required by your lender to buy flood insurance if it is located in one of the high-risk flood areas.  This type of insurance may be purchased through your insurance agent utilizing the National Flood Insurance Program.

A homeowner's insurance policy does not cover flooding, so a separate flood policy will be required. If you are in escrow, or will be soon, you will want to investigate as quickly as possible if there have ever been prior flood claims involving that property. One of the standard ways of finding out about prior claims is by ordering a CLUE Report (Comprehensive Loss Underwriter Exchange) which gives a 5-year history of the property.  These reports have been an established source for a number of years and are available at a minimal cost of approximately $20.00.  Other sources such as the seller's Transfer Disclosure Statement, a natural hazard disclosure report, and a professional and qualified home inspector are also ways of learning of prior claims and potential for flooding, and location in a flood zone.  Be aware, however, that California and federal guidelines differ on whether or not a specific property is partially located in a zone, so final determinations are made when the flood insurance is applied for.

The cost of such policies vary by type: coast policies, high risk policies and preferred risk policies. The cost can range from an extra $5,000 a year, to $196 a year, depending also on prior claims and type of coverage.

According to one local insurance agent, quotes made for the local area after October 1, 2013, are significantly higher than before, and are over $3000 for an annual quote.

Property owners, if you live in such a coastal area or other flood zone area, please find out about Elevation Certificates. By obtaining one and providing it to your insurance agent, you may obtain accurate information about your risk, and actually lower the amount of your premium in some cases.  An Elevation Certificate compares your property with the Base Flood Elevation (BFE), a marker for a flood with a one percent chance of occurring.  Insurance rates are based on the building's elevation above this base elevation.   The elevation can save the owner money, as the higher above the BFE a building is located, the lower the insurance premium will be.  Surveyors who perform the evaluations charge varying amounts, so by contacting your insurance agent you may find the most qualified professional for Elevation Certification.

If you are considering selling your home, considering the recent cost increase in this flood insurance, do you think this would be an important certification to obtain prior to putting it on the market?  Yes, it would be, because if a buyer finds out in escrow how much more the additional flood insurance is, it might be a deal breaker.  But if you, the seller, have the up front information, that is important information to provide to a buyer who can then decide if the extra insurance is feasible, or if they have options in level of coverage.

To find out more information, go to http://www.floodsmart.gov.  Find more Southern California mapped areas .  If you are unable to find a local insurance agent, please contact me for this and a FEMA Fact Sheet about Elevation Certificates.  This information is current as of 12/19/2013.
 
For an evaluation of your home's current market value, I am always available at no obligation. 

How Does an Owner Cope with a Coastal Property Near Rising Water Level?

If you live in California, and Southern California in particular, your property may be near the coastal areas and at or near sea level--and therefore closer to the water table levels. At certain times of the year there are annual high tides, i.e., the one seen almost up to the asphalt level of Pacific Coast Highway through Huntington Harbour.

Houses with basements, or more likely crawl spaces under the raised foundation, may show signs of moisture or even flooding. This is dealt with by creating sumps--or holes in the ground to collect water--and installing sump pumps. The pumps may be set up with connectors (i.e., a hose) to carry the water off the property, via drains, or whatever method complies with local codes.

While a buyer should obtain professional assistance about the best type and system to install, if you're buying property almost level to the water, don't be surprised to find out you may have to deal with this.

In more extreme cases, you may want to find out about subsidence and call in another expert. You will want to review the natural hazard disclosure reports, and even local flood zone reports available online through FEMA. Also, be aware that if the property is in a specific FEMA flood zone, additional insurance may be required before your lender will fund your new loan, or otherwise require you to obtain the additional insurance if you already own the property. You may be able to obtain an elevation certificate issued by a qualified surveyor if your property sits at a high enough elevation.

For more information about contacting an appropriate local professional, please feel free to give me a call.