One of the more frustrating aspects of purchasing real estate in our area is navigating the nuances of flood insurance. It’s a difficult issue to nail down, as it affects different parts of Gulf Shores, Orange Beach, and Fort Morgan differently. And those difference can significantly influence what you purchase.
Here is a quick rundown of COBRA, Flood Insurance and how it affects you:
What does COBRA stand for?
What does COBRA define?
It removed the Federal government from financial involvement associated with the building and development in underdeveloped portions of designated coastal barriers, which included the great lakes. In doing so, these areas were classified as “Coastal Barrier Resources System (CBRS)”, and deemed protected.
Land in protected COBRA owners from receiving insurance for buildings constructed on that land, the NFIP says.
When was it first identified?
1983, since has been amended multiple times.
What is the NFIP?
The NFIP helps property owners minimize the impact of flooding on private and public structures by providing affordable insurance and encouraging communities to enforce regulations for floodplains. Devastating or catastrophic flooding won’t destroy a homeowner with affordable insurance, as the risk is alleviated.
How are COBRA and the NFIP connected?
For land designated in COBRA zones, a homeowner with a mortgage is unable to purchase flood insurance from the NFIP. This is because the COBRA land is protected, and carries a higher risk of flooding.
What does this mean for me, the homeowner?
As required by the NFIP, you must purchase flood insurance if your community lies within a CBRS. Because you do not qualify for the NFIP programs, that leaves you with having to purchase insurance from a private provider. This can be very, very expensive.
The designated flood zones are very well defined in coastal communities like Fort Morgan, Orange Beach, and Gulf Shores. And because of these variances insurance fluctuates in different locations. Also, your rates are affected by the elevation of your home. The higher your house’s base elevation is, the cheaper your insurance will be.
In any case, it’s very important to consult your real estate agent to navigate personalized flood insurance questions. Being informed is the best thing you can do for yourself when beginning to think about buying. The last thing you want to do is be caught off guard by required payments because you didn’t do your research. This is obviously a very tricky subject, and we’re experienced in guiding homeowners in our area to make great informed decisions.
Contact us at Century 21 Meyer – Kris Powell for any further questions.