From Michelle Sandlin’s “On the Move” column in the Houston Chronicle
Publication Date: June 6, 2014
There is nothing like a good old-fashioned Houston thunderstorm to get Houstonians thinking about flood insurance.
But what about those who are moving to Houston? Should they opt for flood insurance when purchasing a home in Houston?
According to Chris Badger, owner of Chris Badger State Farm, every homeowner should have flood insurance, and the coverage is relatively inexpensive considering this important safeguard.
“All of Houston is in a flood zone. You’re either in the 500-year flood zone (Zone X), or you’re in the areas that are more prone to flood, which might be an AE Zone,” he said. “I think it’s important regardless of whether you are required to purchase flood insurance for your mortgage or not, because an inch of water in your house can do over $100,000 worth of damage in 10 minutes.”
Flood insurance is a separate policy and only covers rising water. Badger said the rates are fairly comparable from one insurance company to the next because they all must adhere to FEMA’s rules and regulations in terms of what they are allowed to charge, which is based on the specific zone in which a property is located. For those in the AE Zone, which is more prone to flooding, Badger said that the cost could be a bit more complicated.
The best advice that Badger said he could offer to someone who is moving to the Houston area and is interested in purchasing a particular house is to call an insurance agent and ask to have the flood determination report pulled for the property. He said that this is the easiest and fastest way to know what zone a property is in, and what the potential risk is for flooding.
In areas of Houston that are more prone to flooding, Badger said that the age of the house could be an important factor.
“If it’s a newer house, built in the last 10 years, it’s probably built up out of the floodplain enough. If it’s a house that’s built in 1965, and it’s a high-prone flood area, I’d be a little nervous,” he said.
One of the issues in Houston is that the weather can go from a drought to a flash flood overnight, Badger said. When that happens, the water is not able be absorbed fast enough because the rain is coming down so fast and hard, so the water just takes off and starts running.
Badger said an important thing for people who are relocating to Houston to keep in mind, is that when they find a house that they want to purchase that is fairly recent construction, but in the AE Zone, that it is likely to have been built up. He said that it is very important to obtain an elevation certificate in order to get an accurate rate for flood insurance in these properties.
Elevation certificates cost roughly $400, but Badger said that the cost savings could be thousands of dollars in flood insurance premiums.
“It can change the rate in some cases from $10,000 to $1,700 a year for the same coverage,” said Badger.
Badger said that he would recommend for someone relocating to the area to get an insurance agent, at least for education purposes, early on in the process. Insurance premiums as a whole are typically more expensive in Texas, whether it’s flood insurance or homeowners insurance, because Texas is prone to weather-related losses.
“If it was me and I was relocating here, I would be looking at my agent to put me in touch with an insurance person to tell me before I get attached to some of these houses whether they are in a flood zone or not, and what’s the potential rate I might be paying,” he said.
Another important factor that Badger said relocation buyers need to be aware of is that if a property is in the X Zone, which is the lowest premium zone, that there is a 30-day waiting period before a flood insurance policy can go into effect. This is to keep people from running to get flood insurance two days before a storm.