You found the perfect home in a cute neighborhood. The kitchen is to die for, and you can walk to all of your favorite coffee shops and restaurants. There’s just one problem, the house is in a flood zone. And with it, you have to pay for flood insurance. You think to yourself – “How bad can this be?”. I’m here to tell you, the insurance rates can get bad, and they are not going to get any better. Our advice – Do not buy a home in a flood zone – ever. This happened to me when I was looking for my dream home, and luckily, I didn’t sign the paperwork on the house, so I escaped and went to higher ground.

The home I fell in love with is in Skagit Valley Washington, in the beautiful town of La Conner. If you have ever been there, you will agree it has some of the prettiest scenery you can ask for. The last time La Conner had a flood was in the early 1950’s. That was over 60 years ago! Since then the community built an extensive dike system to prevent that from happening. However, someone from the federal government declared La Conner to be in a flood zone. You see, because of the decades old flood, they consider the town to be in a 100 year flood plain.

Granted, my dream home had an elevation certificate. This helps with the insurance costs. The previous owner paid to have a survey done on the property to determine how high it is above a normal flood level. The surveyor takes measurements of the surrounding area and determines the height level of the living area of your home. The home had a foundation that was 3 foot high, which was great for that area, but unfortunately it did not have flood vents that were 1 foot off of the ground. Flood vents allow water to pass under the house, instead of around the house, causing less pressure on the foundation.

Just how much was flood insurance going to cost? Well, I talked to my realtor, and she said the current home owners are paying an extra $60 a month for flood insurance. Hey – that’s not bad. But when I went to my insurance agent to get an estimate, they said they would have to reapply for flood insurance with FEMA. FEMA came back and with a quote and the costs went up to $100 per month. Why was my insurance quote higher than the current owners? Well, you see, hurricane Katrina and Sandy changed everything. The congressmen and senators in Washington DC wanted FEMA to not be in the hole anymore, so they took a vote, and determined they needed to raise the rates for flood insurance. Each year for the next 5 years in a row, FEMA is going to raise the rates of their flood insurance until they can make up for their losses from the payouts they have made to their flood victims. So if you think the rates are high now, wait until you see what they are 5 years from now.

And there’s the problem. La Conner has not flooded in over 60 years. It will probably not flood again for another 60 years or more because of the new dike system. But since the town is in a flood zone, and there is an insurance entity involved, the rates are going to go higher and higher. Insurance entities love to raise their rates, and FEMA is no different. The problem here is, you can’t shop around for a better flood insurance quote. All flood insurance goes through FEMA. So these high rates are here to stay. 

Our advice – stay away from buying a home in low lying areas that have flooded or had a hurricane in the past. The flood insurance is too high, making it hard to sell your home to the next buyer. 

Chart courtesy of the Ohio Department of Natural Resources Fact Sheets