Do you have flood insurance on your wash?

[Strava]

I will be closing on my 3ss/1iba next month. The note will be ballpark $290k, flood ins on that $290k will be about 8k a year. I wanted to see if anyone was able to get around carrying flood-ins on a mortgaged property?

 

[Randy]

Nope, I have never had flood insurance on any of my properties. I think it depends on where you are located, are you in an area that is prone to flooding? Where are you located?

 

[semocarwasher]

No I do not and I would place some pressure on the lender to avoid this requirement. I have had a couple of lenders on a couple of different properties try to force flood insurance on me and avoided each time. Many times the flood maps are out of date or just plain wrong. On the other hand if there is potential for flooding that could in fact damage the facility you need to evaluate if the business can handle the expense. $8000 is a painful amount of money on that size of wash.

 

[washnvac]

This is a government mandated requirement. If you have a mortgage with a bank on a property in a flood zone, you must have it. We had a property in this situation--found out one day before settlement it was in a flood zone. A few years ago, we were able to refinance another location and draw out enough to pay off the mortgage on the flood zone location. That is the only way around it--no mortgage.

From 2005 to 2016 we paid a total of $49k in flood insurance--literally money down the drain. And the problem is, the premium will increase every year due to more and more flooding across the U.S.

 

[DavidM]

You may be able to split the loan into two loans, an equipment loan and a real estate loan. I think the flood insurance would only be required on the building. That may lower the premiums although leave you with less protection in the event of a flood.

 

[srr5008]

We are in a flood plain, and did not have flood insurance. This happened twice, 5 years apart. Both storms exceed the 500-year storm events, and generated the highest level ever recorded (by 5') in the Susquehanna River at the nearest reference point. Bays were at the 100' flood elevation, the equipment room floors were 2' above the 100-year flood level, and we still had 3' of water in the equipment rooms. $35k in damage, and a lot of head/heartache.