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Flood Zones: What You Should Know

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Flood Zone: What You Should Know

By: Adam M. Matheny

Natural Disasters are a Reality

Natural disasters have always been a part of reality for everyone, whether or not you are a property owner. They can include flood risks, fire risks, and more. If your home is in a region that’s prone to natural disasters, you might feel disheartened by their increase in both frequency and severity and be thinking about selling. Of course, being in a disaster prone area, it will likely impact your property value, which can be worrisome. But don’t worry—the more you know, the more you can protect the value of your property and the more prepared you will be when you are presented with the opportunity to sell.

Information is Power

Not all flood zones are the same. The Federal Emergency Management Agency (FEMA) classifies a flood zone as high risk if its code starts with either an A or a V, which designate the base flood or 100-year flood zones. In zone B or shaded zone X, properties are considered to be at a moderate risk of flooding. In unshaded zone Z or in zone C, flood risk is classified as minimal.

You can find out how FEMA classifies your property’s flood risk by accessing their Flood Map Service Center online. The higher your risk of flooding, the more important it is that you add a flood insurance policy. Flood insurance is generally not included in homeowner’s insurance policies. The average annual flood insurance premium is around seven hundred dollars a year. If you’re selling your home, it’s a good idea to let potential buyers know about this, and you can even incentivize them to buy by adjusting the purchase price to provide them with a discount on their first year’s insurance costs.

Silver Linings

It is disheartening to find out that your home’s value might be impacted by being a flood zone, but it’s not all bad news. Most high risk zones are classified as such because they’re near water—and that’s a selling feature. In some cases, this may cancel out the potential property value hit your home takes by being in a flood zone.

Risk Mitigation

Mitigating the flood risks to your home can also go a long way in reducing your flood insurance premiums—both for you and a potential buyer. Eliminating standing water, which can weaken a home’s foundation, is one such strategy. Elevating the first floor above base flood elevation can also significantly lower flood insurance premiums. While it can be costly on the front end, the savings over time can offset this, as can the added value to your home in the event of a sale.

And, if you have flood insurance but haven’t had to tap into it, let your potential buyers know this as well. This can reassure them that just because you live in a flood zone and need to have flood insurance doesn’t mean that flooding is inevitable.

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