THE ULTIMATE LBI BUYER’S GUIDE
Everything You Need to Know About Buying a Home on Long Beach Island
Long Beach Island Flood Insurance
Flood insurance is one of the most important concepts for buyers and sellers to understanding in the LBI NJ real estate market. There is a real cost to flood insurance which may be significant in some cases. While most homes on Long Beach Island are at or above base flood elevation (making their insurance costs low), there are still many important elements to understand before entering into a transaction in the LBI real estate market.
Homeowners Insurance
Since Hurricane Sandy, which made landfall at the end of October 2012, tremendous focus has been placed on flood insurance. While it is true that flood insurance can be an expensive bill, the reality is that most homes on Long Beach Island meet or exceed the current base flood elevation requirements. In many cases, homeowners insurance is the more expensive of the two insurances that lenders require. Therefore, it is important to understand home insurance factors in the LBI real estate market to help keep this cost affordable.
What Is Covered By Flood Insurance
When buying a home in the LBI real estate market, it is important to understand how a flood insurance policy is rated and what is covered by flood insurance. Long Beach Island flood insurance coverage limits are an essential step to protecting your investment in the LBI real estate market.
Flood Insurance Costs
Since Hurricane Sandy made landfall at the end of October 2012, flooding and Long Beach Island real estate flood insurance costs have been important topics for both buyers and sellers to understand. While Long Beach Island has made a miraculous recovery since Hurricane Sandy’s impact, many buyers and sellers still lack an understanding of Long Beach Island flood insurance costs. They need to be informed so they may make wise decisions when buying or selling a home in the LBI real estate market.
How Flood Insurance Is Rated
There are a number of factors that must be considered when buying a home in the LBI real estate market. Flood insurance is indeed a cost that must be taken into account. The only way to determine the true cost of flood insurance is to obtain an elevation certificate and obtain a quote for the cost based on the rating.
Flood Insurance and the LBI NJ Real Estate Market
The damage caused by flooding, some of which was only a few inches of water inside a house, showed very clearly the advantage of having a house raised on pilings or block foundations. House Raising on Long Beach Island, New Jersey, which prior to the storm was a rather obscure profession, suddenly was thrust into the forefront of many people’s minds. Let me begin by saying that not every house on Long Beach Island needs to be raised. This, above all else, is perhaps the biggest falsity concerning house raising on Long Beach Island. FEMA has established a Base Flood Elevation or “BFE” for all properties on Long Beach Island. This is the level above sea level to which FEMA recommends a new house be built to or a house be elevated to, should a major renovation take place. The BFE is computed by adding the natural elevation of the ground above sea level with the elevation of the structure. For example:
-
A house has a Base Flood Elevation (BFE) of 8 feet.
-
The ground elevation is 5 feet above sea level.
-
The house must be elevated 3 additional feet to meet FEMA’s requirement.
A house needs to be raised (by order of the town and FEMA) only if a new construction is taking place, or if the house was “substantially damaged”. A house is considered to be “substantially damaged” when the costs of repairs exceed 49% of the replacement value of the structure. There are in fact many locations on LBI where the ground elevation is already at Base Flood Elevation, and therefore, no additional elevation would be required to meet FEMA’s minimum standard. This deals only with the requirement minimum. There is an inherent advantage to a house that is raised, as it will be safer in future storms and flood insurance will be less expensive. Thus far, my goal is simply to point out that House Raising on Long Beach Island New Jersey is not a requirement to obtain flood insurance and is not a necessity for all homeowners on LBI.
