I saw a tweet this weekend that linked to a flood insurance rating that set premiums over $30,000 annually. It got me curious, what caused such a high premium? Basic data, the house was pre-FIRM construction; was located in an A-9 flood zone; had a lowest floor elevation of 4 feet and lowest ground elevation of 4.1. Essentially it is looking at 5 feet of water in the house.
There are key issues anyone in this situation needs to be aware of. There are different rate procedures for pre- and post-FIRM construction. If you are a pre-FIRM you want to be sure you have the correct tables used, post-FIRM construction that is not to flood zone standards are going to pay dearly for this choice. I believe that, in the example I cited above, post-FIRM rates were applied to a house built before the flood maps became effect.
On the insurance quote the basic ($60,000) and additional ($190,000) insurance costs were assessed a 15.43% rate. After a $5,000 deductible, the annual cost was $33,243. As pre-FIRM construction the rates appear to have been much lower. Basic ($60,000) insurance appears to be 0.81% and the highest additional ($190,000) rate 1.17% (source) to these rates an increased cost of compliance fee is assessed of $70 for the first $230,000 of coverage is assessed and $55 for the additional coverage to $250,000. Total cost for the pre-FIRM structure should not exceed $2,834.
Another flood insurance site suggested a cost of $700 per $100,000 for an A Zone pre-FIRM structure.
These costs are more in line with costs being reported to me around Dennis. If you are being quoted higher costs, ask why and shop your insurance business around. Be sure that the correct rates are being applied.