Texas coastal cities have been hit by numerous flood events over the past 30 years, resulting in billions of dollars in damage. Recently, a reporter with Bankrate.com asked for advice for homebuyers looking to buy in flood-prone areas. The bottom line: a little research in advance can save buyers a lot of distress in the long run.
Bankrate: How do you determine what hurricane/flood zone a home you're considering purchasing is located in?
You can search homes by address through the Federal Emergency Management Agency’s (FEMA) online flood map service center. Be careful, though, because flood maps change over time. An area may currently have a low risk of flooding, but that could change. Also, keep in mind that, according to FEMA, about one quarter of all flood insurance claims come from low- or moderate-risk areas.
Just because a home has not flooded previously doesn’t mean it won’t flood tomorrow. Consider whether you are downstream from a dam or reservoir. Following Hurricane Harvey, many Houston homes were damaged by the release of water, not by the actual hurricane.
How do you research a home you might want to buy that's in a hurricane zone?
You can use FEMA’s map service to search for the address. Also, call your county and look at other sources, such as local universities, for research on flooding.
How do you make sure that your home is protected if you do opt to buy in a hurricane or flood zone?
A buyer must become knowledgeable, not just informed. Read the flood insurance policy carefully. Note the type of protection and the covered causes of flooding. Flood insurance does not cover everything. Damage caused by moisture, mildew, or mold is generally not covered. Damage to currency, precious metals, valuables such as stock certificates and property and belongings outside the home will come out of your pocket, too. Temporary housing is generally not covered.
What are the most important factors to consider when you're considering a home in a hurricane zone?
The degree of flooding risk is an important factor. The year the home was built is important because flood maps change. A home that was originally “safe” can find itself in a high-risk area and not meet the necessary standards for the new flood zone. Has the home flooded in the past? Are you near a reservoir or dam? What type of damage has the home sustained? What is the cost of insurance? What is the insurance going to protect you against? What has happened to home prices in the region? Have they been increasing or decreasing?
What are the financial implications of buying a home in a hurricane zone?
Hurricane-prone areas result in higher insurance payments and lower home-price growth. In other words, you can expect lower return on a home purchase. Insurance may not cover everything, and there may be difficulty when trying to sell the house later.
You can read Bankrate's article online.