After having visited what was considered a "prototype" flood insurance changes class, I've finally decided to drop in and share some of what I've learned during this entire flood insurance situation (read: debacle). Keep in mind that as with everything involving our federal government and FEMA, nothing is ever set in stone.
First and foremost, I cannot stress enough that you need to ask about the flood status of either your home or the home you're interested in buying. You can ask your buyer's agent or listing agent to get you this information, or you can head on over to www.floodsmart.gov for more information.
A few things about your major flood zones:
X Zones are lower to moderate risk. Your home likely doesn't need flood insurance, and it's totally up to you whether you'd like to get insurance or not. You can check with the county and find out if there's been any flooding in your neighborhood, and that can also help you in your decision. Because really, "low-risk" doesn't mean it'll never happen.
AE and VE Zones are both high risk, and you'll be required to insure your home for flood damage. This is where it'll get more complicated (obviously). Because of storms that have gone through the East Coast, (more specifically Sandy), you're going to find that insurance companies are a lot more gunshy about insuring homes in flood zones on the coast, if they even do it at all. They all have specific requirements that you'll have to abide by to ensure that your insurance isn't voided entirely (and yes, that is possible depending on how your home is built). If you currently have a home in either of these zones, there's a really good chance that your flood insurance will go up by as much as 25% over the next year.
As you can probably guess, if your home's zoning changes from low/mid to high risk, flood insurance will be mandatory. One saving grace is that the National Flood Insurance Program (NFIP) has extended the purchasing of low-cost Preferred Risk Policies for 2 years, for homes that are newly mapped into a high risk zone.
If your home is actually going down from high risk to moderate/low risk, then congratulations! You don't have to keep your flood policy if you don't want to. OR, your rates may even drop if you decide to stick with your policy.
If you have no idea what your flood zone is:
Call the county and see if they have an elevation certificate on file. If your home is older than around 2000, there's a good chance they don't have one on file as for some bizarre reason a lot of those certificates were either lost or never kept around. If they don't have one, then you'll need to have an elevation certificate completed for your home. Expect to pay around $400-$500 for this, however after it's done, it'll be recorded with the county for safekeeping and you'll get your own copy as well. After October 1st, you'll need this to close on a home sale anyways, so if the county doesn't have one on file at all, just have it completed and maybe add this to the sales price of your home if you're selling it and try to make that up.
Take some time and find out the current flood zoning in your home and surrounding neighborhood, and next time I'll give you some information on things you can do to avoid the risk of voiding your flood policy, and also about how your home's risk is determined.
Thanks for reading!