Facts of Flooding
Flooding is a fact of life in Norfolk. Sitting almost at sea level, in close proximity to the Chesapeake Bay, with several rivers weaving through and even under its landscape, the city of Norfolk experiences flooding several times a year during heavy rains, nor’easters and as recently demonstrated, in tropical storms. Once upon a time, flooding was not as common as it is now, and as luck would have it, this is when many of our neighborhoods were laid out and built. Some neighborhoods were even built on fill land where streams use to be visible. With flooding not a major issue at the time when these now historic homes were constructed, they were often built with systems and basements below the flood plain. While these historic homes and neighborhoods add to the charm of our maritime city, they and their owners are now at the mercy of Mother Nature and geology. As Norfolk slowly sinks, and the frequency and intensity of storms increase, flooding has become an increasingly costly inconvenience for residents. What’s a lover of historic homes and Norfolk to do? Become informed and be proactive. Norfolk floods – accept that rates are on the rise and take steps to mitigate costs and continue your love affair with Norfolk. One of the reasons flood insurance rates are on the rise is because recent superstorms have damaged many locations outside of the traditional flood zones. According to floodsmart.gov, “people outside of mapped high-risk flood areas file more than 20 percent of all National Flood Insurance Program flood insurance claims, and receive one-third of Federal disaster assistance for flooding.” Government subsidies have begun slowly disappearing and flood hazard areas have expanded, causing rates to rise for those who traditionally had to carry flood insurance and increasing the number of property owners required to carry it. Today if your property does fall in a high risk area, mortgage companies will require flood insurance, even if they did not at the time of purchase. Annual flood insurance costs have gone up sometimes 200-300%, cutting major holes in the disposable income of many local property owners. While most of Norfolk is technically in a flood zone, not all neighborhoods and houses are in high risk areas. It is important to note that your homeowner’s insurance does NOT cover flooding,
so homeowners affected by a flood who do not have flood insurance are left to foot the bill. Even with flood insurance in place you may still incur major unexpected costs by being under insured. One of the unexpected costs to a property owner is not having coverage for things like housing while their property is being repaired. Fun fact: your mortgage company will still expect to be paid even if your house becomes unlivable due to a flood; therefore you not only have to continue to pay the mortgage and insurance on your now uninhabitable house, but you may also have to pay for a place to live. Not exactly a pleasant surprise to your budget. Other examples of people who are commonly blindsided by flooding are property owners who may have purchased their property with cash or paid off their mortgage. While these people do not owe Mr. Mortgage company monthly payments, they also do not have the sweet oversight of Mr. Mortgage helping them protect their common investment. Unexpectedly having to spend tens of thousands recovering from a flood can have a devastating effect on your balance sheet. As a real estate professional, I deal with properties severely impacted by flooding on a daily basis. The cost of flood insurance can be significant and with the frequency of flooding increasing, buyers and sellers alike are feeling the effects. Say your home’s elevation calls for a flood policy that will cost $2,400 annually and you decide to sell your home. This $2,400 a year equates to $200 a month in extra costs to the buyer, for which they get nothing but peace of mind during a flood. Based on today’s rates, the buyer could buy a house outside the flood zone for roughly $40,000 more and still have the same payment. To add insult to injury, $200 a month extra in mortgage payments will pay the interest and principle on a more expensive house. This is something that weighs heavily on buyers when deciding on a new home, leading to lower offers, lower sales prices or buyers declining to make offers on homes in flood areas. Thankfully there are ways to be proactive, which can help buyers and sellers to make wise real estate choices and help mitigate costs on their real estate investments. First and foremost is to be informed and work with an agent who can help you understand and weigh the nuances of flooding, and flood insurance. Have an insurance or real estate professional check your address in the flood maps. An updated elevation certificate that shows the elevation of the home in relation to the base flood elevation is used by insurance agents to quote flood insurance premiums. As you prepare for the sale of your home, having an updated elevation certificate is VITAL. Without a current elevation certificate, flood insurance will be quoted at worst case scenario elevations, which can easily scare away buyers, delay an offer, or lead to a low offer. Because flood insurance quotes can alter the affordability of your home, listing your home without a current elevation certificate can lead to over pricing, longer market times and often unrealistic expectations on the value of your home. Additionally, an elevation certificate can help you determine if there are actions you can take to
reduce your premium, including installing flood vents, moving mechanical or electrical systems to higher elevations, or even filling in basements. Exploring these options may help mitigate the damage caused by a flood, lower flood insurance premiums, and potentially increase the value of your home. As a buyer, be sure to check to see if these options have been explored and what if any effect they would have on the flood insurance rates. Last but certainly not least, even if you are not required to have flood insurance, get optional flood insurance. With the frequency and intensity of storms increasing, it is not a case of if you may be impacted by a flood, its is case of when. If you do have flood insurance, be sure to check to see if you are adequately covered. Being proactive, staying informed and utilizing using skilled professionals are the best way to protect yourself and your investments – and to continue loving the city in which you live.