Shopping for a new house?

It can be disturbing to realize that the beautiful home you’ve fallen in love with is located in a flood zone. While it’s not necessarily a deal-breaker, there are some serious considerations to understand before moving forward with buying a house in a flood zone.

Flood zones are defined by the Federal Emergency Management Agency (FEMA) and are categorized according to their level of risk. A high-risk area is defined as having a 1+% chance of annual flooding. A low-to-moderate location has a 0.2% or less chance of annual flooding.

FEMA maintains a flood map center where you can research the classification of the location and the level of concern. Zones labeled A and V are the highest risk zones. These are areas that are either coastal or riverside communities. These Special Flood Hazard Areas will have to carry flood insurance and have a 25% chance of serious flooding in a 30-year timeframe.  Zones labeled B, C, and X are lower risk.

Insurability for Flood Zones

Flood insurance is available to homeowners in any location. However, houses which are located in high-risk areas will pay higher premiums than those in lower-risk zones. In addition to normal homeowner’s insurance, flood insurance can range from a few hundred, to thousands per year. The good news is that proper flood insurance provides excellent coverage in the event of damage, even providing temporary housing if necessary. Coverage can vary, so it’s important to
discuss the options with your insurance agent.

Assessing the Risk

There is no reason to dismiss a home simply because it’s located in a flood zone.  There are many beautiful locations which are also considered high-risk, including properties with a storm drain located on them.  Pay attention to how water flows towards and away from the house.  Is the property at the bottom of a hill? How close are nearby creeks, streams, or larger bodies of water? How much rain does the area typically see? Are the gutters run correctly away from the house? Any visible cracks in the foundation? These are some factors to observe when assessing if a house is worth the risk.

Before you write an offer…

When buying a house in a flood zone, it’s important to consider all of these implications and the potential costs involved.  A home inspector can provide further insight, so don’t waive this contingency in your contract!