Flood Insurance “Rains In” Some Buyers

February 26, 2010
REALTOR® Outlook

Just when we think the every day challenges of this market have been managed, a very onerous requirement has been imposed on recent homebuyers.

More problematic is the imposition of new flood insurance requirements on existing homeowners who never planned on adding $150 to their monthly house payment.

In case you haven’t heard, the Federal Emergency Management Agency (FEMA) has issued revised Flood Insurance Rate Maps for all of Ventura County that became effective on Wednesday, January 20, 2010.

These maps show areas that are considered to be in a floodplain, and therefore now require homeowners to obtain flood insurance. Flood zone disclosure is a statutory requirement in California real estate transactions.

The revised FEMA maps expand the 100-year flood zone, affecting properties mainly in the vicinity of Moorpark, Camarillo, Oxnard and Fillmore. Approximately 11,000 parcels that are not now entirely or partially within a 100-year flood zone were drawn into this high-risk zone when the revised maps became effective.

According to FEMA sources, the agency plans to follow this map release with Letters of Map Change that will modify the new flood zones in the cities of Oxnard and Fillmore and in neighboring unincorporated Ventura County.

On the new flood maps, areas behind a levee are now designated as “Zone X Protected by Levee”. Approximately 3,700 parcels in Ventura County are included within this new map zone, primarily in and around the cities of San Buenaventura, Simi Valley and Fillmore.

 Although flood insurance was previously required in this new zone -- this has changed. Some levees in Ventura County may not meet FEMA’s 100-year flood protection standards. Levee owners must demonstrate, within a specified time, that the levee provides protection from a 100-year flood. Otherwise, the levee-protected zone will be revised to the high-risk 100-year flood zone designation, which will trigger the flood insurance requirement.

Prospective home buyers must enlist everyone on their team to see if the property’s flood zone and insurance requirements apply. The cost is significant. In one case, a recent home purchaser just discovered that the cost of flood insurance is going to cost $150 per month, a significant increase on any budget.

 There are several trigger points on this new requirement. One is the Natural Hazards Disclosure which will note that the area is in a special flood hazard zone. Research it. Don’t just acknowledge it.

Buyers have rights to inspect the various aspects of the property prior to removing their contingency to purchase the property.  Insurance is one of them.

Quiz your insurance agent to be sure you have all the facts you need before completing your purchase. Ask the seller(s) for more information.

Ask your REALTOR(r) to help you find out what you need to know. Remember that buyers have a duty to investigate, not just rely on the word of others.



Kay Wilson-Bolton is the owner of CENTURY 21 Buena Vista in Ventura and Santa Paula. She always brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is www.realestatemagic.com


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