If you are looking to purchase property in Destin, FL or on Hwy 30A, it is very important that you understand how flood zones work. It is OK to own a property in a flood zone. In fact, all properties on the Emerald Coast are in a flood zone. The most common are Flood Zone X "no flood insurance required", Flood Zone AE, and Flood Zone VE. I live on Mack Bayou near the Sandestin Resort and I am in an AE flood zone. My house was built above the flood plain and I am able to insure my home up to $250,000 for less than $800 a year. My house is not in a Cobra designated area so I am able to purchase flood insurance from the NFIP "National Flood Insurance Program" and it is affordable. My slab is also elevated so I have a good sense of security.
Below are some basic things you need to know about flood insurance.
1. Before you make an offer or during your due diligence period, be sure to call an insurance agent to inquire about flood insurance. They will be able to tell you quickly if your home is in the COBRA area and if you are in flood zone X, VE, or AE. If you are not in the COBRA area and in a flood zone X, they can give you a quote pretty quickly. If you are in a flood zone other than flood zone X, they will need an elevation certificate for a quote. You can also request a copy of the current flood policy from the listing agent. A couple of good insurance agents to call with questions are Coastal Insurance at 850-231-0042, Niceville Insurance at 850-729-2131 or Harris Insurance at 850-244-2111. Your Realtor can probably give you a good idea but the maps change and can be hard to understand. Be sure to call an insurance agent to verify. This takes only a minute. Be sure to have the property address handy.
2. THE COBRA AREA. Cobra is a designated area that is not covered by the NFIP "National Flood Insurance Program". This means if you desire flood insurance, you will have to obtain private insurance and the rates can be high. In some cases, this can be a deal breaker. Some owners in the Cobra Area elect to self insure due to high premiums. You can have a flood Zone X, AE or VE in a cobra zone. If the home is in a COBRA area, it will not be eligible for a VA, USDA or FHA loan. Find out if the property is in a Cobra Area 1st. Some popular Emerald Coast neighborhoods located in the Cobra area are Kelly Plantation, Tuscany and Cypress Dunes.
Below is the FEMA Definition of COBRA
"The Coastal Barrier Resources Act (COBRA) of 1982 and later amendments, removed the Federal government from financial involvement associated with building and development in undeveloped portions of designated coastal barriers (including the Great Lakes). These areas were mapped and designated as Coastal Barrier Resources System units or "otherwise" protected areas. They are colloquially called COBRA zones. COBRA banned the sale of NFIP flood insurance for structures built or substantially improved on or after a specified date. For the initial COBRA designation, this date is October 1, 1983. For all subsequent designations, this date is the date the COBRA zone was identified. COBRA zones and their identification dates are shown on Flood Insurance Rate Maps (FIRMs).Communities may permit development in these areas even though no Federal assistance is available, provided that the development meets NFIP requirements."
3. Flood Zone X "No Flood Insurance Required" - Flood zone X is the best flood zone but understand, you can have a flood zone X that is in a COBRA. This means you can get a conventional loan without purchasing flood insurance but if you really want a flood policy, you will have to purchase it from the private sector and the rates can be high. If your property is in a Cobra and Flood Zone X, this is best case scenario for the COBRA area because flood insurance is not required by the lender and a borrower can purchase the property without having to purchase the high insurance. If you require flood insurance for peace of mind, a flood zone X in a cobra may not be the best option for you.
4. Flood Zone Properties that are not in Cobra - If the property is in a flood zone like AE or VE but not in a COBRA area, you can get NFIP insurance if the elevation meets their criteria. Always check the insurance expenses prior to making an offer because this really can vary from house to house. If you are in a zone other than Flood Zone X, you will have to provide the insurance agency with an elevation certificate. In some cases you can get a copy of this from the seller or existing insurance provider. It is very important that you do your due diligence! Call the insurance agent and give them the address and get a quote before making an offer or during the due diligence period.
5. LOMA Letter - A Letter of Map Amendment (LOMA) is an official amendment, by letter, to an effective National Flood Insurance Program (NFIP) map. A LOMA establishes a properties location in relation to the Special Flood Hazard Area (SFHA). LOMAs are usually issued because a property has been inadvertently mapped as being in the floodplain, but is actually on natural high ground above the base flood elevation.
Because a LOMA officially amends the effective NFIP map, it is a public record that the community must maintain. Any LOMA should be noted on the communities master flood map and filed by panel number in an accessible location. Basically a LOMA converts your property to a situation like Flood Zone X (no flood insurance required by a lender on a conventional loan).
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