Flood insurance 101: Understand your risk, reduce costs and increase home values

While homeowners should consider flood insurance coverage in the event of a river or urban flooding, insurance alone isn’t enough. Proper planning is also vital to avoid major headaches, extra expense or tragic losses during a flood.

Agents with Valley-based Hauglie Insurance advise residents to make a flood plan, which includes making sure family members know how to get out of the house and neighborhood, where to meet up and how to contact each other.

Flood planning also includes readying the home for a disaster. A good exit plan will ensure that contents are protected and valuables removed or stored out of harm’s way.

Vital medications, for example, must be accounted for early on. If medicine needs to stay refrigerated, have a cooler handy, because floods often mean power loss.

Antiques are covered, but only at functional value. That means that your grandmother’s antique table may wind up being replaced by just another new table. Homeowners should ensure that valued antiques are safely high and dry or on the truck out of a flood zone in a disaster.

Homeowners also need to ensure that invoices, receipts and flood claim documentation are kept in a waterproof bag and, if possible, in a fireproof safe. Documentation is needed to prove to FEMA that repairs were completed.

Time-stamped photos are also a good way to document before-and-after realities.

“Photos are the easiest and most valuable thing you can do in protecting your home and contents before a fire or flood,” says Farmer’s Insurance agent Angela Donaldson. After a disaster, “not only are you emotionally stressed, but now you have to remember where everything was and what it looked like—and you have to articulate that to an adjustor.” All that stress can be saved by having photos on hand.

Urban flooding

The west coast has the highest incidence of urban flooding in the nation, and actually, it can have an equal or greater burden on local resources and FEMA than the east coast’s catastrophic floods. In fact, says Donaldson, 25 percent of claims are in the low to moderate risk zones where flood insurance is not required.

The National Flood Insurance Program or NFIP, offers preferred risk flood insurance to aid families with damage not covered by homeowner’s insurance. Early fall is the time to buy a flood policy. Flood insurance has a 30-day waiting period, and Valley storms and floods have been known to hit before Thanksgiving.

Separate outbuildings need separate flood coverage. If a homeowner has built a freestanding office, garage or guest house on their property, disconnected from the main roofline, that building may need its own policy.

Dealing with floods and preparing is a reactive attitude—as Donaldson sees it, residents should shift their way of thinking to be proactive.

“As we continue to experience the consequences of ongoing flood insurance reform, many members impacted within the Valley equate these changes to death and taxes—we know it’s coming and we can’t stop it,” she stated. That said, property owners and families can do many things to reduce the risk of flood damage to their homes that can have additional benefits such as reducing their insurance cost as well as improving property value.

Over the last year, the real estate market in the Snoqualmie Valley has been impacted by the volatility of flood insurance rates. For families, this kind of premium change has meant up to a $600 increase in their monthly mortgage payment. That is money they no longer have to spend at local grocery stores, retailers, school activities, recreation and home improvement.

“What if they can’t afford it?” Donaldson stated. “Do they sell their home? Can they sell their home if that type of ‘living expense’ scares away homebuyers? Possibly, and many realtors have steered homebuyers away from living in the floodplain due to the uncertainty.”

That $600 monthly expense buys a home valued $150,000 less than a home out of the floodplain, she added. “The buyers will run away and homeowners will be forced to walk away because no one can discount their selling price enough to make sense or cents.”

Marketing your home in this environment means making changes that directly affect the cost of flood insurance. Some can be simple and quick, while others involve waiting for mitigation assistance, such as a home elevation or buyout. These changes involve bringing your home up to current building flood code.

The most important factor is your foundation type. Flood insurance rate tables are segmented into nine different foundation types or “building diagrams.” It’s important to stay realistic in your project, if filling your crawlspace to match the level of the exterior grounds cuts off your access to less than 12 to 18 inches of the utilities under your home, it’s best to wait until you can elevate the house. However, if you already have an above grade crawlspace, all you may need to do is add a couple vents to save hundreds a year. Talk to your insurance agent, local building department and contractor—they can be a wealth of information that can save you money now and in the long run.

Preparing for flooding: What you can do now

• Keep all flood claim-related receipts in a waterproof bag and away from risky areas

• Take photos of your home and business as it is now

• Look into alternative storage options, such as raising or moving

• Develop an evacuation plan with your family, employees and for your pets

• Have a list of important phone numbers and sandbag locations

• Teach everyone how and when to shut off gas, electricity and water lines

• Keep household chemicals above flood levels to avoid contamination

• Review your flood insurance declaration page

After the flood: Surviving your claim

• Make sure your home is safe to enter

• Take photos, inside and out