Reduced Flood Risk
Elevating a structure can prevent or significantly reduce flood damage. Properly elevated and constructed, a raised floor foundation can help keep a home far above flood waters. In addition, a raised floor can provide significant savings in flood insurance premiums as shown in Table 2. Many homeowners have incorrectly assessed flood risks to their property. The Federal Emergency Management Agency (FEMA) estimates that 10 million households are located in flood-prone areas. But between 20% and 25% of all flood insurance claims are paid to people living outside the high-risk areas. According to FEMA, there is a 26% chance of experiencing a flood during the life of a 30-year mortgage compared to a 4% chance of fire.
In the face of mounting flood losses and escalating costs to taxpayers for disaster relief, Congress created the National Flood Insurance Program (NFIP) in 1968. The federal government makes flood insurance available to NFIP participating communities that adopt and enforce ordinances to reduce future flood risks. This insurance is available to all owners of insurable structures whether in or outside the floodplain.
It is the task of FEMA to identify and map flood hazards nationwide. Flood Insurance Rate Maps (FIRMs) distinguish several flood hazard zones, including the Special Flood Hazard Area, defined as an area inundated by a flood that has a 1% chance of being equaled or exceeded in any year. This benchmark is also called the Base Flood Elevation, or BFE. The fundamental NFIP requirement for every participating community is that any new or substantially improved residential building must have its lowest floor elevated to or above the BFE on the FIRM.
By elevating a home to meet NFIP requirements, a property owner can reduce the annual flood insurance premium by hundreds of dollars. The higher the floor elevation, the lower the flood insurance premium. Over the life of a mortgage, this can result in significant savings. See Table 2 and Table 3. However, elevating to or above the BFE does not eliminate the requirement to purchase flood insurance in a Special Flood Hazard Area.
Considering other options — slab atop dirt fill or slab on a backfilled perimeter wall — the raised floor may be the most practical and cost-effective way to protect your property and meet local building ordinances in flood-prone areas. Regardless of the foundation you choose, raising the floor to (or above) BFE can help avoid costly mitigation measures such as relocation, demolition, or rehabilitation in the aftermath of a flood.
For more information on flood risk and flood insurance, visit www.fema.gov.
Reduce Flood Risk and Insurance Premiums with a Practical Raised Floor
There are substantial savings in annual flood insurance premiums when a home is raised above the base flood elevation (BFE), as Table 2 illustrates. Actual savings could be even greater because the Federal Emergency Management Agency expects flood insurance premiums to increase 5% per year to cover anticipated flood claims.
|Table 2 Annual Flood Insurance Premiums|
|SINGLE-STORY RESIDENTIAL CONSTRUCTION||SINGLE-STORY RESIDENTIAL CONSTRUCTION|
| Plus 1
Source: Table provided by Alpha Insurance LLC, Gretna, Louisiana (www.alphala.com)
1 National, unadjusted rates for Flood Zone A. Includes $30 policy fee.
2 BFE is Base Flood Elevation or the elevation that a flood will reach with a 1% probability any given year.
3 Plus 1 foot means the living area floor elevation is at least 6 inches above BFE; Plus 2 feet means at least 18 inches above BFE; and Plus 3 feet means at least 30 inches above BFE.
A Raised Floor More than Pays for Itself over a 30-Year Mortgage.
In a flood hazard area, the raised floor can mean real savings in annual flood insurance premiums, lower annual housing costs, and overall lower cost over the lifetime of a fixed-rate 30-year mortgage.
The owners of the example raised floor home, will save $6,605 ($36,630 minus $30,025) over their 30-year mortgage. The savings calculation, shown in Table 3 and Figure 1, is based on annual payments of principle plus interest (P+I) for only the cost of the foundations (Table 1), at an interest rate of 6%. In addition, the corresponding annual flood insurance premiums for a multi-story residence (Table 2) were used, assuming 5% annual increases. Finally, the savings calculation is based upon the net present value of the foundation plus insurance, discounted back to today’s dollars at a rate of 4%.
|Table 3 Foundation and Flood Insurance Cost Comparison|
|RAISED FLOOR + 2 BFE||RAISED FLOOR + 2 BFE|
|Year||P + I
|Total Cost in Today’s Dollars: $30,025||Total Cost in Today’s Dollars: $36,630|
Source: Southern Pine Council calculation based on Table 1 and Table 2.
P + I = Principle plus Interest, BFE = Base Flood Elevation
Raised Floors Help this Community Meet Floodplain Management Goals
The National Flood Insurance Program (NFIP) Community Rating System (CRS) provides discounts on flood insurance premiums in those communities that establish floodplain management programs that exceed NFIP minimum requirements.
St. Tammany Parish in Louisiana is one of those communities. Citizens of St. Tammany receive a 5% discount on their premiums due to ordinances that more strictly define the systems and techniques used to construct a foundation in flood-prone areas. Raised floors are part of the solution.
In designated flood zones, the parish limits the volume of fill that can be placed to elevate the floor of a structure above base flood elevation (BFE). These measures help prevent displacement of floodwaters onto adjacent property. Furthermore, if the structure must be raised over a certain height above natural ground grade to meet BFE, then the builder must use pier- and-beam or pile construction. These open foundations do not displace floodwaters and also allow high velocity waters to flow under the structure.
St. Tammany is also an active participant in the Federal Emergency Management Agency (FEMA) floodproofing program. Under programs such as Flood Mitigation Assistance, FEMA provides grants to help owners of flood-prone homes have their houses raised. To qualify, a homeowner must have a federal flood insurance policy in effect and must have made at least two claims on the policy within the past 10 years.