Wednesday, March 4, 2009

Flood insurance

Posted by SooYeon(Pia), Shin

Tour Stop 1: Who sets the rates?
The flood insurance rate is set by the Federal Emergency Management Agency (FEMA). The rates are exactly the same in the U.S..

Tour Stop 2: How are flood zones rated?
There are three flood zone ratings: A, V, and X.
-“X” means you are not living in a flood plain zone, so rates are lowest;
-“A” is one step up – you are in a flood plain zone and the primary concern is a rising water table. A standard “A” policy costs $2,766/year for $250,000 in flood insurance coverage plus $100,000 for contents. Often, “A” zone is referred as “AE” where “E” means elevation.
-“V” is the highest level. “V” stands for velocity, meaning the property can be damaged by water driven. “V” rates are most expensive.

Tour Stop 3: What zone are you in?
The builder is responsible to prepare an elevation certificate which tells the owner of the house what zone she is in. If the owner takes out a mortgage, the bank will ask her to bring the flood insurance, and the agent will let her know the rate. When there is change in rates, the rates would be changed or stayed same depending on circumstances.

So what should a homeowner have to do?
Step 1: Find out whether you are currently paying for a flood insurance. If you are, go to step 2. But, if you are not and want to have a policy, call to your insurance agent!

Step 2: Check if your rate has increased over 4 to 5 years. If so, try step 3. If not, you are safe.

Step 3: Ask your insurance agent and find out ways to lower your rate.

Step 4: Be persistent. Make sure that you are getting the lowest rate possible in your situation. If you have further question, call FEMA at 770-220-5200.

Flood insurance does not take effect for 30 days after the policy are purchased.

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