Nathan Colmer | Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
Nathan Colmer | Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
There is no question that flood insurance plays a notable role when someone considers buying or selling in the LBI real estate market. The cost of flood insurance can significantly impact the sales price of a home on Long Beach Island. In general, buyers should always ask to see if there is a flood elevation certificate on file when looking at homes for sale in the LBI real estate market and inquire about the current cost of a homeowner's policy. Sometimes a seller cannot produce an elevation certificate or a flood insurance policy. In that case, there should be protection in a sales contract to ensure the buyer does not overpay for flood insurance.
I am often asked about the cost of flood insurance for an elevated home. Many people falsely assume any home on pilings is going to have an affordable insurance rate. Likewise, many people believe that any home that is not elevated will be unable to obtain flood insurance, or insurance cost will be very high. This is not always the case. To begin, it is helpful to understand what is used to determine the cost of flood insurance. An elevation certificate is used to tell key metrics such as the first-floor's elevation above sea level, the flood zone, and the number of flood vent openings. Changes to the FEMA rating system have eliminated some of the importance of the elevation certificate and instead focus on the flood zone and history of flooding. Elevated homes can have a surprisingly high flood insurance cost in the Long Beach Island real estate market depending on the flood zone and the number of flood vents found in the foundation. For example, a home built in a V flood zone that lacks proper venting and construction methods can see a 5 figure annual flood insurance rate.
If you are a homeowner on Long Beach Island New Jersey, or looking to buy or sell in the LBI real estate market, it is necessary to have a complete understanding of flood insurance rates. Flood insurance premiums can constitute a major portion of the ownership expense for a LBI home depending on the factors below. You should always consult with an insurance agent to have a complete understanding of your unique situation. However, some of the indicators of Flood Insurance Rates on Long Beach Island NJ are:
Current Flood Zone on Long Beach Island: Most of LBI lies in either an A or a V zone. V zones are considered riskier and may carry a higher flood premium.
The elevation of the first floor: Not every home on Long Beach Island needs to be raised. The height of a house above sea level is an equation of the natural ground elevation (most of LBI is around 3-10 feet) and the structure's foundation height. Even in a traditional Cape Cod style house, there are about 2-3 feet of elevation in the foundation. When this is added to the natural ground elevation, the end result is many homes on Long Beach Island are already at their Base Flood Elevation and do not require raising to avoid high flood insurance rates.
The house's proximity to a high-risk flood area on LBI: As I mentioned above, most of LBI is either an A or a V zone. A V zone is considered the higher risk area, so if your property is located on the border of a V zone, it may be prudent to rebuild to V zone standards in case the area is remapped in the future.
Flood Insurance Rates on Long Beach Island NJ are based on risk: the National Flood Insurance Program is designed to base the flood rate on the property's risk of flooding. In general, if a property is located in a higher-risk area, you will pay more in flood insurance unless you take additional steps to safeguard the property. Additionally, factors such as crawl space elevation (above or below grade) can impact flood insurance rates on Long Beach Island NJ
Before explaining the insurance costs for an elevated home, we must first understand what determines the price of flood insurance on Long Beach Island. Flood insurance is based on various factors, the most significant of which is the property's elevation. Contradictory to popular opinion, not all homes need to be raised to avoid expensive insurance costs. The elevation of a property is determined by linking the natural ground elevation with the building's infrastructure. With most ground elevations on LBI being no lower than 3-4 feet, most homes on Long Beach Island are only about 1-2 feet below the base flood elevation at worst. An elevated home, meaning a home built high on pilings or on an extended block foundation, will typically see far less expensive flood insurance rates than a house at or below base flood elevation. The flood insurance cost for an elevated home on Long Beach Island will depend on the following:
Most properties will see their best insurance rate 3 or 4 feet above base flood elevation. By building to the maximum height allowed, not only does the risk of damage to the property diminish, so too do the costs of insurance. The number of flood vents in the foundation also plays a significant role. A home for sale on Long Beach Island was built well above the base flood elevation, but it lacked flood vents. The insurance premium for this particular property was roughly $2,600/ year. If the correct number of flood vents were installed, that premium would drop to only $600/ year! Lastly, the flood zone plays a role. Most of Long Beach Island is in an "A" flood zone. FEMA has recently changed how many policies are rated and now emphasizes the flood zone and risk factors.
A survey and flood elevation certificate will tell you some important details about purchasing a home in the Long Beach Island real estate market. Included in these documents will be:
A flood elevation is essential for the determination of flood insurance. All homes on Long Beach Island with a mortgage (located in an A or a V zone) must have flood insurance. Historically, the only way to properly determine the cost of flood insurance is with a flood elevation certificate, although recent changes to FEMA have reduced the necessity of this document. An elevation certificate will tell you important information about the property, including the elevation of the first flood above sea level, the exterior ground's grade, and the number of flood vents in a property. This information is used to determine the rate of flood insurance.