Colorado Flood Insurance
A client called me today seeking a house in Jefferson County, CO. However, the property in Wheatridge, CO falls within a High-risk or Special Hazard Flood Area (SHFA).
Zone AE flood insurance, Colorado
While a history or possibility of flooding may not be a certainty with flood zone AE, the likelihood is higher, leading to requirements of flood insurance by lenders for the new homebuyer and current owners.
She had asked a puzzling question regarding her lender’s request for a flood insurance policy. Uncover why in this article.
Before lending funds to purchase any property, mortgage companies typically perform a flood zone determination (FZD), as shown in the example below.
Most FZD in Colorado classifies as X flood zone, so the lender usually does not need to enforce flood insurance on their borrower.
However, in this case, the property she was looking at had a flood zone AE.
She had questions and raised a concerns about the possibility of their new home being located in an AE flood zone, She asked me is flood zone AE bad?
I explained to her that safety from flooding cannot be judged by the flood zone letter assigned by FEMA. While many believe their homes are secure because they are located in an X zone, the catastrophic 2013 Big Thompson flood proved otherwise. In fact, many homes in the X zone weren’t covered by flood insurance, forcing homeowners to spend their savings or take out loans to fund the repairs. Unlike the X zone, the AE flood zone dictates that homeowners must obtain coverage to be prepared for unlikely flooding, which could otherwise leave them in a financially stressful situation. The bottom line is that every property is susceptible to flooding, regardless of its flood zone classification.
Colorado – AE flood insurance in CO and what is the NFIP
In 1968, the NFIP (National Flood Insurance Program) was signed into law to protect the disaster relief fund from being over-taxed. This helped property owners who couldn’t find flood insurance through a private company. The program intended to provide an option for flood-prone properties, with FEMA (Federal Emergency Management Agency) creating maps of flood risks across counties. While most of the country is now mapped, keeping these maps up-to-date proves challenging due to ever-changing weather patterns and massive developmental shifts. Many of the maps are out-of-date and require frequent updating.
If a zone AE is marked as an FZD, lenders mandate the purchase of flood insurance. The FED requires borrowers in high-risk flood zones, typically identified as A or AE, to buy insurance.
AE Zone flood insurance is used by insurance companies and lenders ensuring compliance with federal regulations using these maps. The cost of Zone AE is impacted as flood nerds will evaluate every option to achieve optimal pricing for clients. We extend the National Flood Insurance Program (NFIP), the default option, to properties where this is suitable. Properties that are older than 1974 are deemed “post firm,” erected before the NFIP program began or before the creation of flood map coverage in that region. In such instances, it is prudent to consider any of the many private flood insurance options available in Colorado. We comprehensively research the flood insurance options available for clients to obtain the great coverage at the great rates.
Flood Insurance Boulder Co
In the wake of floods in 2013, properties in Boulder Colorado are at a high risk for natural flooding. Every property owner should be aware of their flood risk and take appropriate steps to protect themselves and their investment.
You want to get ahead of the disaster before it’s too late–but what if you could actually protect your home from floods? With the right insurance, you can make sure that your home is safe and secure no matter what nature throws your way.
With Better Flood Insurance Boulder Co you can have peace of mind knowing that your home is covered against unexpected floods. Our knowledgeable team has access to premium rates on both the private flood insurance and NFIP and can provide you with the coverage you need. Get started today and stay ahead of potential disasters.
