How is Flood Insurance Effecting the Mississippi Gulf Coast?
More than a decade after Hurricane Katrina, flood insurance is still a hot topic for many along the Gulf Coast. Whether you’re buying a home or a selling a home, understanding flood insurance can have a dramatic impact on your residential experience.
Proper flood insurance is an important part of living on the Mississippi Gulf Coast. Past natural disasters have shown us the ugly possibilities that come with living so close to the beautiful Gulf Coast of Mexico and it’s sandy beaches. Flood insurance and flood zones can be complicated subjects. There are many things that determine the flood insurance rate for your home.
How Flood Zones Effect Flood Insurance
In 2009, four years after Hurricane Katrina, FEMA issued new rules and regulations requiring higher elevations for building. FEMA also released new flood maps, flood zones and moved Base Flood Elevation Levels. Because of these remapped flood zones, there are now entire neighborhoods located below the new base flood elevation levels. FEMA has designated three risk areas: High-Risk, Moderate-to-Low Risk, and Undetermined-Risk areas. Knowing the difference between these areas is even more important when buying and selling a home on the Gulf Coast.
High Risk Areas
By now, we should all be aware of the risks that comes with owning waterfront property. In many cases, flood insurance is required for these homes. Especially if you’re looking to get a mortgage. If you’re looking at a map of flood zones, these areas are designated with letters V or A.
V zones generally include the first row of water properties. The hazards in these areas are increased because of wave velocity – hence the V. Homes in these areas are not only affected by rising water but also by rushing water or wave action. Flood insurance is mandatory in V zone areas.
The A zones usually fall right behind the V zone. In the case of a flood, these areas are anticipated to receive flood waters but limited to no wave or rushing water action.
Moderate to Low-Risk Areas
Living in a Moderate to Low-Risk area is much safer, but still comes with some risk. In these areas flood insurance may not be required, but is still recommended. The cost of flood insurance in these areas can be significantly lower than in high risk areas. If you’re looking at a map of flood zones, these areas are designated with letters B, C or X.
Undetermined Risk Areas
Areas that have not been fully studied are in areas said to be of Undetermined Risk. These areas are labeled with a D on flood maps. A flood risk may or may not exist in D zones, and flood insurance rates will reflect this.
How Flood Insurance Can Effect The Sale Of Your Home
Selling a home in a flood zone is typically more challenging than selling other homes. If a home is in a flood zone, FEMA has estimated that there is a 25% chance that the property will be flooded during the span of the typical 30 year mortgage.
The National Flood Insurance Program is a government program and has to be periodically reauthorized by congress. It is very much subject to change, for the better or worse, at any given time. In some flood zones, it is nearly impossible to find affordable flood insurance. When coupled with the other costs involved in purchasing a property, buying a home in a flood zone can feel overwhelming and unattainable.
It’s critical know that flood insurance policies can be grandfathered for homes built below the current base flood elevation zones. These policies can be very affordable and can pass from one home owner to the next. This can be very attractive for homebuyers and can make or break a deal in many cases.
How Building Elevation Effects Flood Insurance
According to FEMA, homes that have been built or rebuilt in a newly recognized flood zone must be rebuilt to code. The lowest floor of a building must be elevated to or above the Base Flood Elevation to minimize flood damage and reduce flood insurance premiums. If your home is in a flood zone, there are a few things that must be done in order to stay compliant.
- The lowest floor elevation must be at or above the Base Flood Elevation (BFE).
- Enclosed areas below the lowest floor cannot be used for living space.
- Electrical, heating, ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE.
If you’ve ever seen a home on the coast that’s been built on stilts, then you’re already familiar with how base elevation can effect flood insurance.
Finding Your Flood Insurance Rate
To get a firm insurance quote you will need an elevation certificate. These are usually provided by MS Licensed Land Surveyors. There are several land surveyors that provide elevation certificates based on the current and historic maps anywhere along the counties of the Gulf Coast.
The Mississippi Insurance Department (MID) has issued a strong recommendation to Mississippi residents to get flood insurance. You now have more options when purchasing flood insurance with the addition of several new companies offering coverage along the Gulf Coast.
The Mississippi Insurance Department does not regulate the National Flood Insurance Program, approve its rates or changes or have any authority over the program. However, the department encourages all citizens to determine their flood insurance needs to protect their homes and property.
This article is a broad overview of how flood insurance effects the Mississippi Gulf Coast. As usual, we aim to inform our readers about life on the coast. We advise that you to seek advice from a real estate or insurance professional if you are looking to buy or sell property in a flood zone.