Right now I’m pre-approved for a FHA loan. The house that I’m interested turned out to be on a 100-year flood plain. I take that as meaning that there is usually only one flood in 100 years (a pretty long time). Will FHA require us to get flood insurance if we settle on this house or does a 100-year flood plain carry such a small risk that FHA doesn’t worry about it? Also, how much does flood insurance cost a year (ballpark numbers)?
I am not an insurance expert, but what makes you think that buying a house on a 100-year flood plain is a “small risk”?
IF the estimate of one flood per hundred years is correct, you have a chance in 100 every year of being flooded out. What do you think are the chances of your house burning down this year, for example? Do you buy fire insurance?
As for what it should cost, you can estimate what represents value as in the following example:
Amount insured: $10,000
Risk: 1/100 per year
Average annual payout by insurance company: $100
Therefore you can expect to pay $100 to $200 per year in this case.
I would like to know in this context if an FHA 100 year flood is different than any other 100 year flood, or if they are the same thing.
Yes, it does sound damn stupid, but when I lived in Sonoma County CA (USA) and I went to buy a home there, I noticed on the developer’s map (or plat, or whatever it’s rightly called) that a neighboring drainage ditch was labeled “100 year flood line”. I knew the ditch was recently dug (the land had been pasture a few months before, flat as a plate), and so knew the line couldn’t have been based on historical data. They told me that it was as bad as a flood was expected to get in the next 100 years, although they wouldn’t tell me how they had figured that out. The very next rainy season after I bought into the development, we had a flood that they described as a 100 year flood. My house got through it fine, but the downtown (Petaluma, to be specific) went in way deep.
To make a long story short, in the ten years I lived there (1985-1995), I experienced at least three “100 year” floods (so described in the press and by insurance companies). So unless there is a difference between an FHA 100 year flood and some other kind of 100 year flood, I have to conclude they’re pulling the term out of their ass. I’d also conclude that “100 year floods” occur a lot more often than once every 100 years.
By way of further background, the rains in the time period and region in question weren’t especially heavier than normal. What had happened mainly to cause the flooding was that suburban development had built and paved over former “empty” land like pastures and fields. Rain that would have been held relatively inconsequentially ran down streets and drains to the slightly lower downtown area, flooding it.
IMHO, flood insurance is probably a good idea.
A few years ago, I worked as a flood-zone risk evaluator for a company that sold its determinations to insurance companies and banks. We got addresses or lega descriptions, then looked 'em up on the FIMA FIRMs (Flood Insurance Rate Maps). hibernicus is just about right, as far as risk goes. There is, in each year, a 1% chance that floodwaters will reach the 100-year flood line. It may happen more than once a century, or it may never happen. I don’t know what current FEMA policy is on requiring flood insurance, but I do know that the flood maps for Fargo and New Orlans are scary to look at.
Heh. You say “100 year flood” and I say “Stevens Creek”. Back in the 90s the local “crick” that runs through town here, along whose scenic banks had been built many fairly expensive subdivision-type homes, suffered a 100 year flood. And man, were those homeowners ever pissed! They didn’t spend $200,000 on a 4 bedroom 3 bath Tudor with fully finished basement, only to have that basement fill up with a foot of mud. And the smell! :eek: Oh, Martha…
Evidently a hundred-year flood is widely interpreted to mean “sometime during the hundred years after I buy this house”, i.e. not very likely. See, this is precisely your mindset here, Ace: “meaning that there is usually only one flood in 100 years (a pretty long time).”
But that’s not what it means at all. It’s a “statistics” thing which I don’t really get, but which basically boils down to meaning, “your chances of having that hundred-year flood are exactly the same today as they would be in another 99 years.” It doesn’t mean that your chances of having that hundred-year flood are miniscule today, and get larger the closer you get to 100 years down the road. Maybe Caveman can come back in here and explain this better than I can…It’s a 1% risk every year, not 0% this year, and 100% in a hundred years.
All the designation “100 year flood” means is that that’s where the elevation lines indicate, in the considered opinion (note the use of the word “opinion”) of the engineers who surveyed the site, that once every hundred years (“100 years” being a fairly arbitrary seat-of-the-pants designation), the water will come that high. But it doesn’t mean that if Stevens Creek just flooded in a 100-year flood, that the water won’t rise that high again for another century.
Me, I’d buy as much flood insurance as they’ll let you carry.
And it’s interesting to reflect that it was only the folks in the expensive subdivisions on the north side of town who were shoveling mud out of their basements. In the older parts of town, where houses had been carefully set well back from Stevens Creek and other waterways by earlier, more cautious generations of homebuilders, more attuned to Nature’s capacity for watery rampages, nobody was having to drag ruined carpeting out and pile it at the curb.
FEMA tries to point out, as others did in this thread, that it isn’t a 100-year flood. Instead, it’s a 1% chance every year that you will have a flood that will cause the insurance to pay out. Using basic statistics, we find that this means that there is a 99% chance that you won’t have this flood and even a 36.6% chance that you won’t have this flood in even 100 years. If you have the house for only 10 years, there’s about a 10% chance that you will experience such a flood.
Flood insurance generally doesn’t cover what is in your basement as FEMA won’t cover anything below ground level. If you can, get a house where you can walk out of the basement, because FEMA then considers your house as not having a basement. FEMA considers your “basement” to be the first floor.
Also, you may not be able to get disaster relief loans/grants if you don’t have flood insurance. Although, that may vary on a case-to-case basis.
As others have pointed out, FEMA’s FIRMs are generally way out of date and they likely won’t change them unless you are willing to spend a bunch of cash. Our house falls into the 1% flood area using FEMA’s maps but if we use the maps provided by our state’s Department of Environmental Protection (which are about 10 years more recent) we find that we aren’t in the 1% flood area. Others may find the situation to be reversed, i.e., the are actually in a 1% flood area but the map says they aren’t.
On the bright side, if the maps say that you aren’t in the 1% flood rate, but you would still like insurance, the rates are MUCH lower for you.
Finally, FEMA has a pretty good website with a bunch of FAQ sections that covers all of this and more.
Here is FEMA’s definition of a 100 year flood
http://www.fema.gov/mit/tsd/FQ_fld03.htm