How do I know if I need Flood Insurance in Massachusetts?

Am I in a flood zone?

This is usually a question I get if people are thinking of moving to the North Shore. However, Massachusetts has a lot of waterways and it is very different from the western part of our country. I will share with you how I got a seller out of the flood insurance and he got a full refund for the entire year from his insurance company! This was a huge factor when his buyers were considering purchasing his property. Read to the end.

The FEMA Website

The FEMA website is an amazing free tool to find out if a property is located in a flood zone. I like this website because it’s run by the federal government and since the FEMA maps dictate the flood zone, it just makes sense. Place the property address in the search bar and you will be given the zone of the property. It takes a few minutes to load so just be patient. And when it does load you will have the option of downloading the FIRM panel map. That stands for the Flood Insurance Rate Map. In the flood plain world there are areas that flood regularly and those that flood more often and those that we can’t determine. Oh, and by the way, the hundred year floodplain is not an area that floods every hundred years. This is a huge misnomer. That area actually has a 26% chance of flooding within the next 30 years. There’s a lot of misinformation out there. So make sure you get the correct information.

Categories on a FIRM Map

Technically, there are six categories. And within each category there are subcategories. In the end it all gets pretty complicated. But what can I say, it’s the federal government. So let’s start off with the easy ones.

There are coastal barrier resource systems and otherwise protected areas. These areas are areas where it’s not likely that you’re going to find a house. They are areas for wildlife and birds, and especially those green heads, no, I’m just kidding. But before I start listing each zone, and there are so many zones, and that is because each zone has underlying conditions such as ponding of water, the sloping of a terrain, or wave action. Some areas have been surveyed and some areas have not. So let’s dive into the zones.

The zones that I’ve listed here, for example, Zones A, AE, A1 – A30, AH, AO, AR V, VE, A99, all require flood insurance, mandatory flood insurance. Zone AR is a little different because it was decertified and it was part of a previously accepted flood protection area. And as far as zone D, it is not mandatorily required, but it could flood. Zones B, C, and X, the good news is you don’t need flood insurance in these areas.

The flood areas in the zone AE, they’re little more serious. Because that means there is actually a water channel there such as a river or a tributary. And this area must be kept free of human encroachment. And when I say human encroachment, I mean, encroachment from homes and buildings. Please note that every area is so different and sometimes the water is really moving and sometimes it’s just a trickle. It could be that there are a ton of trees and there could be a lot of absorption. It just depends. And while we think that this should be perfect, it’s really not. It’s really on a case-by-case basis. Here is a document form FEMA directly and it delineates all the zones and what each mean – it’s 50+ pages but it’s great knowledge! How to Read A Flood Map

As another example, zone VE is associated with waves. So you can see that there could be huge storm surge that could really wipe out your house. One thing to note, is that your home insurance does not cover flooding. Your home insurance only covers certain situations even when it’s a burst pipe. So you have two options.

You can purchase flood insurance from FEMA through the government funded program called the national flood insurance program or you can purchase it from a private flood insurance carrier. A couple of things to note. According to Massachusetts Law, any flood insurance provider cannot require you to purchase insurance in excess of the outstanding mortgage balance or with a deductible of less than $5000. You may opt for these services, but they cannot require you to do it. As we all see on the weather report each year the storms are very destructive and many private insurance companies have just said the business risk is too high and too large so they don’t provide home insurance or umbrella insurance. In the wake of hurricane Irene and Sandy as an example, homeowners along coastal cities purchased insurance from the Massachusetts Property Insurance Underwriting Association otherwise known as the FAIR Plan. Over time other alternatives have become available so check with your insurance carrier so you can understand all of the costs and what is covered and what is not!

Now as promised, my seller, where we got the flood insurance abated, here’s the scoop. The reality is sometimes the firm maps are just wrong. In the wake of Hurricane Katrina, there was to some extent and overreaction of the lines and the high risk zones. And in our state some of the land that was included in the high risk should not been included. This was the case for my seller. If this is the case for your property there is an application process and several documents you must provide like a signed elevation plan from a licensed surveyor. And should you be successful in getting your insurance abated, your insurance company must refund you the premiums for that calendar year. So it’s worth it. If you have let it go for multiple years the insurance carrier does not have to refund those past years so it’s good to get on it sooner rather than later. Also, if you’re thinking of selling your home this is a big deal for buyers. They are scraping together the money to buy your house. So provide your insurance bill so they can understand all of the costs associated with the purchase of your home.

If you want to uncover all the issues when buying >>Ask for our Ultimate Home Buyer Checklist!

And when selling maximize your home’s value >> Ask for our Getting Ready to Sell Guide!

I hope we have explained a litle more about Umbrella Insurance For Homeowners in Essex County

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