| If you are considering buying a home, its important to | | | | property would typically be less than $1000 per year. |
| understand the insurance that is required. In Florida, you | | | | 4. FEMA Flood insurance is NOT AVAILABLE in |
| typically need three types of policies including, hazard | | | | Coastal Barrier Zones regardless of the flood |
| insurance, wind insurance, and flood insurance. The first | | | | elevation. This is significant, especially for buyers that |
| two types, hazard and wind, are typically quoted in one | | | | will be obtaining financing. |
| premium. While the rates for these two spiked in 2004 | | | | 5. The alternative to FEMA flood insurance is to |
| and 2005, they have came down significantly since | | | | purchase coverage from a private insurer. These |
| then. However, flood insurance is a different matter | | | | policies are typically very expensive and price |
| and requires further discussion. | | | | prohibitive for most buyers. |
| The National Flood insurance Program (NFIP) is | | | | 6. If a property is in a flood zone other than X and |
| federally subsidized and administered by the Federal | | | | located in a CBRA zone, you will not be able to obtain |
| Emergency Management Agency (FEMA). Some key | | | | conventional or government assisted financing. These |
| aspects fo NFIP are: | | | | means you will either need to pay cash or limit your |
| 1. Properties across the United States are rated by | | | | search to exclude these homes. |
| FEMA and assigned to specific zones based on the | | | | If you buy a home, make sure that you determine the |
| properties elevation. For example, AE, V, ZX, etc. Flood | | | | flood zone prior to getting too far along in the process. |
| zone x is the best. This means that flood insurance is | | | | You don't want to pay for inspections, appraisals, and |
| not required in order to obtain most types of financing. | | | | other expensive items only to find out that the |
| However, many people purchase it anyway. | | | | property doesn't qualify for financing or that your flood |
| 2. In addition to the flood zone, certain areas along the | | | | insurance premiums will be expensive. |
| coast are designated to be in "Coastal Barrier | | | | The good news is that there are many homes |
| Resource Zones" (CBRA). Properties in CBRA zones | | | | available that don't require flood insurance. Practically |
| are not eligible for FEMA Flood insurance. They are | | | | speaking, buyers should concentrate on these and |
| third party companies that will provide coverage, but | | | | forget about the perils associated with those located in |
| these are very expensive. | | | | CBRA zones or flood prone areas. A good real estate |
| 3. The majority of flood insurance in the United States | | | | broker will be able to point you in the right direction. |
| is underwritten by the Federal Government. This is a | | | | However, if you do decide to purchase in a CBRA |
| tax payer subsidized program and insurance rates are | | | | flood zone, make sure the price is discounted to |
| typically below true economic costs. For example, if a | | | | account for the additional risks. |
| property qualifies for FEMA flood, the premium for any | | | | |