Living near water? Flood insurance may be for you

  • Leslie Moriarty / Herald Writer
  • Saturday, December 1, 2001 9:00pm
  • Business

By Leslie Moriarty

Herald Writer

SNOHOMISH — Some people shy away from buying homes near rivers, streams and creeks.

Pat Massey is one of them.

"Not me," he said. "I like to keep it high and dry. I’ve seen too much devastation in my time."

Massey is a flood insurance specialist with the Federal Emergency Management Agency in Bothell. Because of his experience, he’s not one to want to live near water. But he’s more than eager to help those who do.

"Most people who carry flood insurance do so because the bank requires it," he said. "But anyone who wants it can buy it."

Flood insurance isn’t something that most home buyers have to deal with, local insurance officials say. In fact, it only affects from 3 percent to 5 percent of residential homeowners in Snohomish County and about 10 percent of homeowners in Western Washington.

But if you are in that percentage, knowing the ins and outs of flood insurance can save you time, money and last-minute panic.

Flood facts

  • The last major floods in Snohomish County were in 1996.

  • The term 100-year flood level, used to determine the need for insurance, is the flood elevation that has a 1 percent chance of being equaled or exceeded each year. Thus, a so-called 100-year flood could occur more than once in a relatively short period of time.

  • A structure located within a designated flood hazard area has a 26 percent chance of suffering flood damage during the term of a 30-year mortgage.

  • To find out whether your property is in a flood zone, call the Federal Emergency Management Agency map center at 800-358-9616, or see www.fema.gov/nfip/ask.htm.

  • The regional FEMA office is located in Bothell and can be reached at 425 487-4678.

  • "It’s all regulated by the federal government," said Bill Holt, a State Farm Insurance salesman in Snohomish. "If your place is in a flood zone and all the maps indicate it is, then you can probably bet on having to get flood insurance."

    In a real basic form, flood insurance is a separate homeowner’s insurance policy that protects the structure in the event of a flood.

    FEMA maps areas that are considered to be flood plains and rates zones near them, based on the chances of flooding in each specific area.

    In Snohomish County, there are 80 separate maps showing flood plains. Massey said all major rivers and their tributaries are included in the areas that flood.

    Whether you will be required to carry flood insurance, and how much, depends on just where in the flood zone your property is located, Holt said.

    What’s also important is the elevation of your home.

    "If your property is even one foot above the base flood zone, then you can save as much as half on your premiums," he said.

    To determine the dwelling elevation, property owners need to have a flood certification done by a licensed surveyor or engineer.

    "In most cases that can cost a couple of hundred dollars," Holt said. "But in the long run you can save on your insurance year to year."

    Why carry flood insurance? And can property owners make the decision on their own?

    Kevin Hassan, mortgage banker at Home Street Bank in Marysville, said when mortgage companies insist on flood insurance its because they are following the requirements of federal loan programs such as Fannie Mae.

    "The guidelines are set by the feds," he said. "Having the flood insurance protects the federal dollars that are being loaned on your home purchase."

    When a home shows up in a FEMA flood plain, prospective buyers can expect that flood insurance will be required. What the premiums will be depends on the type of structure and the amount of coverage.

    But, he said, the base amounts are set by FEMA under the National Flood Insurance Program. Property owners can buy from private companies or directly from the program.

    Massey said about 96 percent of the flood policies are written by private insurance companies. Typically, $125,000 worth of flood insurance on a single-family home costs $600 a year. Some variations occur because of different methods of construction, the size of the home, etc.

    In most cases, mortgage companies require a year’s premium paid in advance prior to closing. Premiums can’t be paid monthly as a part of the mortgage payment, as regular insurance often is.

    And be advised, when property owners cancel flood policies, the mortgage lenders are notified and it can lead to mortgage loans being canceled.

    Another thing for homeowners to remember is that basic flood insurance covers only the dwelling. Covering the contents can add another $300 to $500 to the annual cost.

    You can call Herald Writer Leslie Moriarty at 425-339-3436

    or send e-mail to moriarty@heraldnet.com.

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