There’s an old saying that if you’re lucky enough to live by the sea, you’re lucky enough. Coastal living is certainly a dream, but killer views and a sea breeze can cost you in more ways than you might expect in flood insurance and flood prevention.
If you’re considering an oceanfront abode, it’s worth doing a little extra homework and padding your budget.
1. Be on the Lookout for Flood Issues
It seems obvious, but when you’re out and about touring seaside properties, be sure to look closely for signs of water damage. Homes that are located in floodplains usually show evidence if they have been impacted in the past. Even with an untrained eye, you can flag potential areas for further evaluation.
Telltale signs of past flooding include drop-offs in the grade around the home and water stains on the interior and/or exterior. The ground around the foundation could have level areas and then spots that are uneven. Water stains can also be present on the foundation or siding.
If the home has a basement, you might see water rings around the basement floor, columns or even the joists. Water that has sat still for a long time leaves a distinct mark. Keep your eyes peeled for staining on the floors or weak spots in the drywall.
2. Contact the Seller
If you have any concerns, be sure to ask the seller about the home’s history regarding flooding. The seller is obligated to disclose known defects about the property, which would include information related to flooding. Just remember, the seller may not be able to speak about incidents that happened prior to his or her ownership. You can also ask the homeowner for a copy of his or her CLUE report (comprehensive loss underwriting exchange), which shows a home’s insurance claim history. A claim made about flood damages would show up on this report.
3. Research the Flood Zone
Many waterfront homes are located in flood zones, which are geographic areas that the Federal Emergency Management Agency (FEMA) has defined according to varying levels of flood risk. FEMA provides an online flood map where you can search by address to see if a property falls in a floodplain. The map identifies special flood hazard areas as well as areas of minimal and moderate flood risk. It’s important to note that the flood zones are occasionally updated to reflect current data and studies. This means that you could purchase a home located in a minimal flood zone that could later be placed into a higher risk area due to reasons like rising sea levels.
4. Discuss Flood Insurance Requirements With Your Lender
If you learn that your dream home is located in a floodplain you’ll want to loop in your lender as soon as possible. To secure a mortgage, your lender will perform extra due diligence on the property and will likely require that you obtain flood insurance.
If a home is located in a high-risk zone, you may need to get an elevation certificate. An elevation certificate is prepared by a surveyor and provides the base flood elevation and other figures for the home in relation to the ground. Not only is this tool helpful for the bank and insurance company, but it can also give you important insight into the likelihood of your home flooding. This information might help you decide whether to move forward with the purchase.
It is at the discretion of the lending institution on whether or not flood insurance is mandatory. If you need to purchase flood insurance to finance the home, you’ll want to get a quote sooner rather than later and decide if you can afford the extra cost. If you are paying cash for a property, no one is going to force you into buying flood insurance. However, given the chance of damage to your property, you should strongly consider making the investment on a policy.
5. Purchase Flood Insurance
Flood insurance can run a few extra hundred dollars a year to tens of thousands. Insurance premiums are proportionate to the risk. This means that the higher your home’s risk for flooding, the higher your out-of-pocket expense. Since flood insurance rates are set by a national standard, there may not be a huge advantage to shopping insurance companies based on price. That said, you probably want to speak to a few providers to learn about coverage plans and whether you qualify for any rebates. It’s important that you understand the policy and what exactly is covered should your home ever flood.
6. Take Preventative Measures
Once you own a home, you can take several precautions to safeguard against flooding. For example, you can install a sump pump in the basement to help fight minor dampness and improve drainage around the perimeter of the home. It also makes sense to elevate systems off the ground that are located in the basement. Raising the water heater or HVAC system can mitigate the risk of damage during light basement floods.
Even with the potential threat of flooding and the added costs this risk brings, living at the water’s edge is still desirable. Many believe it is worth the extra expense. As with buying any home, do your research, weigh out the pros and cons and make an informed decision.