If you live in Flood Zone AE, your property is in an area classified as high-risk for flooding. FEMA estimates that there is a 1% chance of flooding each year, which equates to a 26% chance of flooding over the course of a 30-year mortgage – much higher than many other areas. Understanding your flood insurance options is crucial for protecting both your home and your finances. Here are the top five tips to help you confidently manage flood insurance in this zone.
1. Know Your Base Flood Elevation (BFE)
Your flood insurance premium in Flood Zone AE is heavily influenced by your property's Base Flood Elevation (BFE). The BFE is a measurement FEMA uses to predict how high floodwaters might rise during a significant flood event. If your home's lowest floor (basement or main level) is below the BFE, your property has a higher risk of flooding, and you’ll likely face higher premiums.
How to Lower Your Premiums:
Elevate your home: Consider raising your home on stilts, piers, or pylons.
Install flood vents: Flood vents allow water to flow through, reducing the risk of damaging the structure.
Flood Mitigation Measures: Elevate utilities like HVAC systems, electrical panels, and water heaters. These improvements not only reduce your risk but could also lower your insurance costs over time.
2. Flood Insurance is Required for Federally-Backed Mortgages
If you have a federally-backed mortgage and live in Zone AE, you must have flood insurance. This is part of the National Flood Insurance Act, aimed at protecting both homeowners and lenders from financial losses due to flooding. This rule applies to primary homes, second homes, and investment properties.
Even if you don’t have a federally backed mortgage, purchasing flood insurance is strongly recommended if you live in Flood Zone AE, as flood risks are considerably higher.
Not Sure Which Flood Zone You’re In? Check your flood zone using our Flood Zone Lookup tool or consult with one of our flood insurance experts at 866-503-5663. It’s important to stay informed so you can meet all insurance requirements and keep your home protected.
3. Compare NFIP and Private Insurance for the Best Price and Coverage
Many homeowners think the National Flood Insurance Program (NFIP) is their only option, but private insurance policies are becoming increasingly popular due to more comprehensive coverage, often at a lower price.
Key Differences:
Coverage Limits: The NFIP offers residential properties a maximum of $250,000 for building coverage and $100,000 for contents. Given the cost of housing, this will likely leave part of your home unprotected. Our private insurance carriers typically offer significantly higher limits; up to $5,000,000 in building coverage and $500,000 for contents.
Additional Coverage: Private flood insurance policies commonly offer coverage options that are not available from the NFIP, such as additional living expense coverage (temporary living expenses if your home is uninhabitable due to flooding), basement coverage, and replacement cost coverage for personal items rather than their depreciated value.
Rates: Private insurance companies use advanced risk modeling to precisely assess your home's location on the property. This allows for more accurate pricing tailored to your specific risks, often making private flood policies more affordable than those offered by the NFIP.
Comparing NFIP and private insurance is key to finding the best coverage at the best price. Luckily, we offer both! Let our flood experts help you shop for the right policy. They can assist you in comparing quotes from multiple carriers to find a policy that fits your needs and budget.
4. Don’t Wait! Take Advantage of Shorter Waiting Periods for Private Insurance
Flood insurance isn’t something to put off until the last minute. While the NFIP has a 30-day waiting period before coverage starts, private insurance policies from FloodPrice have a much shorter waiting period, from 0 to 15-days. This is especially important if you’re approaching a season known for heavy rain or hurricanes.
When the Waiting Period Doesn’t Apply:
The waiting period is designed to prevent homeowners from purchasing insurance only when a flood is imminent. However, the waiting period does not apply if you are:
Buying a new home and your mortgage company requires you to purchase flood insurance.
Refinancing a home and the mortgage company requires you to purchase flood insurance.
By planning ahead and knowing the specific waiting periods for both NFIP and private policies, you can avoid being caught without coverage when you need it most.
5. Understand the Factors that Influence Your Flood Insurance Premium
Flood insurance premiums in Flood Zone AE aren’t one-size-fits-all. They vary based on several factors, including:
Proximity to Water: Homes closer to rivers, lakes, or floodplains often face higher premiums due to the increased risk of flooding.
Elevation: Homes with the lowest floor elevation could face higher premiums, while elevated homes may qualify for discounts.
Foundation Type: Homes with basements might have higher premiums than those with a slab foundation. Also, homes that are elevated on stilts or piers may receive a discount.
Coverage Choices: Higher coverage limits for both the structure and your personal belongings can mean higher premiums, but they also offer better protection in the event of a flood.
Deductibles: A higher deductible can lower your annual premium, but remember that this means more out-of-pocket costs if you file a claim.
Steps that Can Lower Your Risk and Premium:
Investing in floodproofing measures can sometimes help reduce your premiums and your risk of flood damage. Some options include:
Installing flood barriers or levees around your property.
Sealing basements to prevent water infiltration.
Using water-resistant building materials in areas prone to flooding.
These steps not only safeguard your home but could also lower your premiums.
Get the Right Flood Insurance for Your Home
Living in Flood Zone AE means flood insurance isn’t just a smart decision —it’s often a requirement. Make sure you compare both NFIP and private flood insurance options to find the best fit for your home. Our flood experts at FloodPrice are here to help you compare policies, understand coverage, and secure the best protection for your property.
Ready to get started? Contact us today for a personalized quote, and let’s protect your home from flood risks together!
