Sharon Power with Silva Realty Group shares her knowledge in this Video about Flood Zones and how not keeping your Flood Insurance can impact a real estate transaction.
The full transcript can be found below.
Sharon can be reached at 508-264-1530
Sharon’s Website: http://realestate.silvarealtygroup.info/idx/agent/54101/sharon-power
Hi, My name is Sharon and I’m an Agent with Silva Realty Group in New Bedford. I’m going to talk to you today about Flood Insurance. I live in a Flood Zone. I’ve learned a lot over the last several years so I want to share my knowledge with you. Flood insurance is a huge issue today with buyers and sellers. We know how to advise buyers when they want to buy a property in a flood zone, but, what do we tell sellers?
Advice for Sellers
My biggest advice is that if you have a flood insurance policy, to never drop the policy. Because most people, once they’ve paid off their house, they figure they don’t need it anymore. We haven’t had a flood in 50 years, so they don’t need flood insurance. But, when you do that, FEMA considers you as if you never had a policy. So, if you had an affordable policy that could be transferred to a buyer, and you decide to get rid of the policy, then you’d have to start all over again. You most likely will have to get an elevation certificate. You may no longer have an affordable policy to transfer to a buyer, so it’s like your starting all over again. It most likely becomes unaffordable for a buyer. I’ll give you an example. I had a seller who had a policy and he paid $1,000 a year. Once he decided that he didn’t need the flood insurance anymore he dropped it. It then became $1,800 a year. We see that all the time. I was told by an insurance agent, that if you have a FEMA policy you can drop it down. You don’t need to carry $100,000. You can drop it down to $10,000 or $5,000, and then it’s affordable and that policy still stay in place. So that is one of the most important things. If you carry flood insurance consider not dropping the policy.
Advice for Buyers
When you’re on the buying side, make sure there is a policy in place. If there’s a policy that a seller has, you can assume that policy. They may have a policy that they took out many years ago that’s still affordable, so you can assume that. If there’s no policy, then the seller has to do some homework and get an elevation certificate and get a quote. Before you even proceed to purchase a property you need to know the information. Getting those two things, the quote and the elevation, is the first place to start.
Real Estate Agent’s Role
We as agents can help you through the process with flood insurance but it’s very important for you, as a consumer, to find an insurance agent that you trust. They can give you the information because with FEMA, regulations change, rules change, zone changes and things like that. They’re up to date with all the latest information regarding flood insurance, so again we can guide you, but it’s very important that you seek out an insurance agent to help you with a quote on flood insurance.