Flood Insurance?

Question

I wonder if you buy a separate flood insurace for your rental properties.  I have rental properties in Tampa, Atlanta and Las Vegas.  I do not worry about Las Vegas, but flood is a threat to my houses in Atlanta and Tampa.

My property insurance excludes any damages caused by flood, which I think is typical.

So, do you guys buy separate flood insurance for your rentals?  If so, how much you pay and any recommendation for insurance company?

Joe Bertolino · Answer

All flood insurance is backed by the NFIP,  the carriers just service the policies.  The rates are all the same based on the floodzone and elevation.  Buy it from the same agent that provides the landlord insurance.  It is inexpensive if you are not in a flood zone.   30%+ of all flood claims are from water/sewer back ups that are generally not covered on landlord policies.

Marc Bodinger · Answer

Not sure what the laws are like in the states of concern to you but as someone from the NY metro area, get the flood insurance. I have never seen so much damage due to flooding in my life. One coworker of mine told me they had it for years and years and it was a complete waste of money and luckily they had it for this one.

Brandon Turner · Answer

I buy flood insurance if the lender requires it. Most of my properties are located in a federal flood plain, so they do require it. It's not cheap ($900 a year, or so) and you have to buy a separate policy for each house.

Ron Robin · Answer

https://msc.fema.gov/webapp/wcs/stores/servlet/FemaWelcomeView?storeId=10001&catalogId=10001&langId=-1
This is fema flood zone map,
All flood Insurance is Federal.
My properties are all south of New Orleans (yes there is something south of New Orleans other then swamp.)  One property is in flood zone X and I pay about $200 dollars a year.  The others are in AE and I pay about 1200 a year each.

Cuong Le · Answer

If you are in a flood zone, check to see if the required flood policy will work with your numbers before you close on the property. Otherwise, we don't get it.

We do tile and same paint in all of our properties so if there is water damage, we could use what we would have paid toward the elective flood premium toward sheet rock, carpet and paint which are all inexpensive.

If you set aside repair/maintenance fund from your cash flow (which you should anyways), that will help offset the costs as well. It really depends on your risk tolerance and whether it makes sense for your area.

Lynn McGeein · Answer

I only pay for flood insurance on the one rental I have in a flood zone (AE) as it is required for the mortgage.  The one corner of the structure actually located in the flood zone is a 7' high crawlspace, not used for anything, (although tenants store lawn chairs in there over the winter).  The new Biggert-Waters Flood Reform Act is already causing problems in certain areas -- hopefully not mine -- but I have already stopped looking in one of my favorite neighborhoods for my next purchase as it will definitely be affected, and I do not want any risk of huge increases in flood insurance premiums.

Wes Eaves · Answer

One of my rentals is in South Tampa but not a mandatory flood zone.  Although we haven't had a direct hit from a hurricane since I've been here, we've had some pretty bad storms.  I had flood insurance on this rental for a couple of years but cancelled it...yes it's a risk, but so is investing :)

Bienes Raices · Answer

I don't have it because all of my houses are in Zone X (low to moderate). I'm taking a bit of a risk, I know. The problem would be if a tropical storm stalled over this area and created rising waters.

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