Reducing Flood Insurance Costs

[Tom Brooks]

Flood insurance is a major issue given the weather conditions the eastern seaboard has seen in the last few years. Many expect it will continue to be an issue with climate change. I am sure many of you are seeing rate increases that are hurting your bottom line.

What can be done to reduce premiums and protect our investments? Several mitigation techniques can often significantly impact your costs. Lower premiums mean more cash flow and often a more valuable property.

There are Wet and Dry flood mitigation techniques that applicable in different settings. This can mean something as simple as having foundation flood vents installed for a crawl space or garage. This can also be as complex as a dry flood proofing system preventing water from going through building entrances.

More and more we are seeing entire buildings raised to reduce premiums and protect structures. Properties can also have some of their crawl spaces or basements filled in to reduce premiums. 

Beyond that work with Flood Insurance maps themselves can reduce premiums with a Letter of Map Amendment. 

My point is that "the price" isn't always "the price" if there is something you can do to change it. You can use this to get better returns from your current properties and as a competitive advantage with value add investing in new ones. Additionally mitigation techniques might help reduce vacancy in the event of a flood or hurricane by reducing the amount of damage a structure receives and thus reducing the time needed for repairs.

So at this point you are probably wondering well how much can I save and how much will this cost? Well that depends on what is going on with your elevation certificate and what your current premiums are. You can potentially save thousands annually but varies from case to case.