RE: Real Estate Podcast

Clint C. Galliano, REALTOR® (00:00)
Here's something that catches buyers off guard every single week in this market. The flood insurance number in the listing, that's the seller's number, not yours. If that policy transfers to you, great, you keep their rate and their increased schedule. But if it doesn't, or if there's been any lapse in coverage, you're starting a brand new policy at today's full rate. And that difference can be significant. Let's talk about it...

Ben Harang (00:42)
Hello everybody. I'm Ben Harang and welcome to another episode of the RE Real Estate Podcast. With me today is my cohost, Clint Galliano. Good afternoon, Clint. How are doing today?

Clint C. Galliano, REALTOR® (00:56)
I'm doing wonderful, Ben. How you doing?

Ben Harang (00:59)
I'm doing terrific on this nice balmy afternoon today. Might have a little rain in the next couple of days, it's not something we can't use, or it is something we can use to avoid those double negatives. All right, what are we talking about today, Clint?

Clint C. Galliano, REALTOR® (01:17)
All right, today we're talking about risk rating 2.0 and flood insurance and how it affects us. ⁓ we're not trying... yeah, it's real fun. ⁓ So we're not here trying to talk people out of buying property in flood zones. Majority of Terrebonne and Lafourche, they have...

Ben Harang (01:25)
fun stuff.

Yeah.

Clint C. Galliano, REALTOR® (01:40)
Are they there in what's considered a special flood hazard area? There's a lot of parts that aren't, but we've got them all over the place. And in most of it hasn't flooded in decades, luckily, thankfully, or thankfully to the levee systems. And flood insurance in our market, it's a lender requirement. So if you're making a loan for a property,

they're going to require that you have flood insurance if you're in that special flood hazard area. And it's not a reflection of your property's actual day-to-day risk. And so that's something to keep in mind. it winds up being more of a financial decision than a risk decision. So this episode's about understanding the rules so that you can buy smart and not about fear mongering.

Ben Harang (02:22)
Mm-hmm.

Clint C. Galliano, REALTOR® (02:31)
We're going to be covering what risk rating 2.0 is and how it replaced the old system, why the new methodology is a particularly poor fit for South Louisiana, and what it means practically for buyers and sellers in a transaction, and what you can and can't control and how to factor it in from day one.

Ben Harang (02:53)
talk about the old system versus the new system as far as premiums go. The pre-risk rating 2.0, the NFIP premiums were based primarily on flood zone designation and the structures elevation relative to the base flood elevation that were on the flood insurance maps.

Clint C. Galliano, REALTOR® (03:16)
Flood zones vary depending on when the flood insurance rate map was adopted. Older FIRMs (flood insurance rate maps), use A, B, and C designations. Lafourche Parish is currently under an older FIRM Newer ones use AE, VE and X, and others. But we're not going to talk about those. Same concept, different labels depending on when your parish was mapped.

So Terrebonne Parish has adopted the new FIRMs and they are all AE, VE, and X.

Ben Harang (03:42)
you

And there's some confusion because X zones in Lafourche under the old system that hasn't adopted the new maps or inside the corporate limits of municipalities is the same as C, which is not a special flood hazard risk flood zone. So that's just a little nugget. The old systems.

kept premiums relatively low and consistent across the market. For most of South Louisiana homeowners, that was a good deal and intentionally slow. So cross-subsidization wasn't a flaw in the oil system, it was a feature. It kept flood insurance accessible in a region where lenders require it to close. And it used to be based nationwide. Now they say that each state has to

sink or swim on its own, which is a major shift in policy by FEMA, not by Congress.

Clint C. Galliano, REALTOR® (04:56)
So what changed in October 2021? FEMA launched risk rating 2.0 in two phases. So any new policies that were written after October 2021, were priced, the premiums were priced based on risk rating 2.0. And then renewals starting in April of 2022 were priced under risk rating 2.0.

Ben Harang (05:25)
And like I said, risk rating 2.0 was FEMA's own initiative, not a direct congressional mandate. Congress pushed toward risk-based pricing through the Biggert-Waters Act back in 2012. But the specific risk rating 2.0 methodology and implementation was FEMA's design choice. And to this day, after multiple lawsuits, nobody can figure out

Nor will FEMA explain how the risk rating 2.0 came about and what it's based on.

Clint C. Galliano, REALTOR® (05:59)
Yeah, from what I could understand, they hired a contractor to develop the algorithm to calculate the pricing. ⁓ And supposedly that algorithm is proprietary to whatever contractor they hired, so they can't share with us how insurance is being priced. They can't give us a formula for us to calculate ourselves. So new system uses catastrophe models.

Ben Harang (06:07)
Mm-hmm.

Clint C. Galliano, REALTOR® (06:28)
and property specific data to calculate a unique risk score for each structure rather than relying primarily on zone and elevation.

Ben Harang (06:38)
And the zone designation still matter for lender requirements. If you're in a special flood hazard area, your lender still will require flood insurance, regardless of what you think about FEMA's math. But the zone no longer directly sets the premium rate.

Clint C. Galliano, REALTOR® (06:57)
There's one unchanged limitation. NFIP building coverage is still capped at $250,000. For higher value homes, that gap between coverage and replacement cost is a separate conversation buyers need to take into account.

Ben Harang (07:15)
why the model is a poor fit for Louisiana. The catastrophe model underlying risk rating 2.0 were built around tributary watershed flooding, systems where water flows toward a central channel and risk increases with accumulation upstream.

Clint C. Galliano, REALTOR® (07:36)
South Louisiana is a distributary system. Water flows away from the main channel, spreading outward through bayous and marshes rather than concentrating. The flood mechanics are fundamentally different from what the model was designed for.

Ben Harang (07:52)
and applying a tributary system model to a distributary region produces risk scores that don't accurately reflect how flooding actually behaves in Lafourche and Terrebonne parishes.

Clint C. Galliano, REALTOR® (08:08)
And there's also a major gap in the model or what the model doesn't credit, the levee systems. While they may document that levee systems are there, any of the characteristics that would impact any flooding calculations that are presented by the levee system are not taken into account. So the majority of our market hasn't flooded in decades because of significant flood control infrastructure.

FEMA's risk rating 2.0 methodology does not factor in the protective effect of those levies when calculating risk scores. Home buyers are paying for risk that the levee system has effectively eliminated, and FEMA isn't adjusting for it.

Ben Harang (08:51)
Yeah, you got to love FEMA. What does this mean for premiums in our market? This is where the rubber meets the road because the old system used cross-subsidization, I'm going to get that word right, to keep rates accessible. And because risk rating 2.0 is phasing toward individualized risk pricing, many properties in our market are seeing premium increases.

Clint C. Galliano, REALTOR® (08:53)
Hmm.

Ben Harang (09:19)
year over year.

Clint C. Galliano, REALTOR® (09:22)
So by federal law, FEMA can't increase the premium pricing more than 18 % for existing policies. So properties that are significantly underpriced under the new methodology will see steady annual increases until they reach that full risk premium provided by the NFIP. And it won't.

be when you look at what you paid last year versus what you're paying this year, it won't be exactly 18 % because there's also fees on top of that to cover, I guess, insurance companies that are actually selling the policies and stuff. But ultimately, you're probably looking at closer to 20 % or 21 % increases every year.

Ben Harang (09:55)
Mm-hmm.

And the practical effect is a buyer who takes over an existing policy inherits a current rate and the scheduled increases. A buyer who starts a new policy begins at the current full rate. And that's often a meaningful difference. We've been hearing about the 18 % increase for a while now. I just looked up to see when those 18 % rate increases will end and when we think

everything will get to an actuarially sound rate and that's 2037. So 10 more years of the increases being limited to 18 percent but if you bought a new policy today it would go straight to the actuarially sound rates.

Clint C. Galliano, REALTOR® (11:01)
Yeah, and so to qualify that, that's when they estimate that all of the current policies that are in effect that are below the risk rating 2.0 rates will be at the same level as the full risk premium.

Ben Harang (11:13)
Mm-hmm.

Clint C. Galliano, REALTOR® (11:18)
All right, so what drives your specific premium now? Factors you can't control. Location. Proximity to flooding sources is baked into the address. You can't move the bayou

Ben Harang (11:33)
and flood history for the property. FEMA's models incorporate historical claims data. A property with prior flood losses carries that signal forward.

Clint C. Galliano, REALTOR® (11:46)
And then flood types. Property on coastal storm surge zone carries a different risk than one on a slow rising riverine zone, even at the same elevation.

Ben Harang (11:58)
and factors that can be influenced. Replacement cost value. Buyers sometimes over insure. The replacement cost value drives the premium. So getting an accurate structural replacement cost estimator matters.

Clint C. Galliano, REALTOR® (12:14)
And then contents versus building coverage. These are separate coverages under NFIP. Building coverage is what lenders require. Whether you need contents coverage is a whole separate conversation.

Ben Harang (12:28)
and elevation certificates. Having a current one on file gives the insurer accurate data rather than conservative assumptions, which can affect the quoted premium.

Clint C. Galliano, REALTOR® (12:41)
And what we're seeing in practice is that if you're marginal and you can get an elevation certificate that shows that you're well above the base flood zone, base flood limit, then you could potentially get a LOMA that's letter of map amendment. And that would specify your property as being

Ben Harang (13:04)
Mm-hmm.

Clint C. Galliano, REALTOR® (13:09)
in the better flood zone. So that may be able to get rid of the need to carry flood insurance with your lender. But again, it's kind of hit or miss. it's worth the $350 or so to get a survey for that elevation certificate. But there's no guarantee that it will. I don't think it'll lower your costs any, but it may.

keep you from having to have it because of your lender. go ahead.

Ben Harang (13:38)
Now, there's

when when Terrebonne accepted the new flood maps, there were a rash of Loma applications to remove property from the special flood hazard zones that required flood insurance. And a remarkable number of them were removed, which indicates a flaw across the board for the new maps.

Clint C. Galliano, REALTOR® (14:08)
This is true. I hadn't heard that, but that makes sense.

Ben Harang (14:11)
So,

yeah.

Clint C. Galliano, REALTOR® (14:14)
You may also hear about mitigation and getting mitigation credits for flood insurance. Those are things like putting in flood vents or breakaway walls or similar measures are primarily relevant for coastal storm surge zones. So the V and some A-E zones near the Gulf ⁓ where you see this is like camps in Coquitree and Dulac and Dularge.

Ben Harang (14:41)
Mm-hmm.

Clint C. Galliano, REALTOR® (14:42)
they're on pilings and anything on that first level needs to be breakaway so that when the storm surge comes through, it breaks it down as opposed to knocks the whole structure down. But the majority of our market, they're inland communities and they're inside of levees, those measures aren't applicable because there's no chance of any kind of storm surge that could do that kind of damage.

So don't let anybody sell you on mitigation upgrades that don't fit your flood type.

Ben Harang (15:08)
Mm-hmm.

Yeah, only do the mitigation upgrades if you do get a discount in your flood insurance premium. Because it's not going to change the system. It's not going to change the zone. It may change the price.

So, all right, how about grandfathering? The question everybody asks, under the old system, a property could be grandfathered at a lower rate even after a rate change. Risk rating 2.0 largely eliminated that.

Clint C. Galliano, REALTOR® (15:46)
And when a property is new owner can inherit the existing national flood insurance policy rate, but only if they continue without lapse. If you let it go or let it lapse, then you have a new policy that you have, you have to buy a new policy. And even then it takes 30 days for that to go into effect once you actually purchase it.

Ben Harang (16:10)
Well, the 30 day waiting period doesn't apply if you're buying it in conjunction with the real estate closing. So, but as we both know, transferring it is a good idea. What we've come to realize is not all flood companies, flood insurance companies will allow the policy to be transferred. ⁓

Clint C. Galliano, REALTOR® (16:17)
Gotcha.

That's true.

Ben Harang (16:36)
Some

will cancel and rewrite it at the same price, but some will cancel it and say you're buying a new premium, buying a new policy at the new premium. So be aware of that. That's a question you want to ask early on in the process.

Clint C. Galliano, REALTOR® (16:50)
Yeah, I experienced that when I bought my townhouse in Natchitoches and the seller had flood insurance and wanted to transfer it to me and the carrier would not allow them to transfer the policy. And so I got it through the brokerage that sold me my homeowner's policy and it wound up being at a cheaper rate than what the seller was paying. So I was happy.

Ben Harang (17:04)
Mm-hmm.

That's crazy because those flood policies should all have the same. Every policy should be the same rate from from company to company. Every policy is not the same, but your policy should be the same price dollar for dollar from regardless of where you buy it from. ⁓

Clint C. Galliano, REALTOR® (17:34)
And it

may have been private coverage, I don't know.

Ben Harang (17:36)
Yeah, yeah. Okay.

Private flood insurance, when it makes sense. For properties with lower actual risk, the egg zone near the boundary, modest replacement cost value, private carriers can sometimes beat NFIP premiums significantly.

Clint C. Galliano, REALTOR® (17:59)
for high-risk properties in AE and VE properties with prior claims. Private carriers often won't write the policy or exclude the flood history.

Ben Harang (18:10)
And buyers shouldn't assume that private is always cheaper. The NFIP is the only viable option for most flood-exposed properties in the region. Now, this is changing a little bit. There are some private flood insurance companies that are coming into the market. Sometimes they're less expensive than the NFIP program. Sometimes they're more. So it's not a bad move to price both of them if private insurance is available.

Clint C. Galliano, REALTOR® (18:39)
Talk to the insurance brokers.

All right, so.

Moving on, what can and can't you do about it? And so I'm a big proponent of change the things you can and don't worry about the things that you can't change, but you still got to know how to deal with it. All right. So we can start out with what buyers can't do. You can't shop the NFIP for a better rate. Ben just alluded to that. Premiums are fairly standardized. Every agent writing NFIP policies gives you the same number.

Ben Harang (18:55)
Mm-hmm.

Clint C. Galliano, REALTOR® (19:14)
But as we also said, private insurance may give you a better number.

Ben Harang (19:21)
And you can't assume that the seller's premium will be your premium after you buy the house. That takes some legwork to decide before you get into it.

Clint C. Galliano, REALTOR® (19:32)
All right, you also can't rely on the current FIRM zone alone to understand risk or cost. Zone designation no longer drives the premium calculation.

Ben Harang (19:46)
Ignore flood insurance for cash purchases because no lender is requiring it. The risk doesn't disappear because there's no bank involved. Just because you're not required to get it because you don't have a loan doesn't mean you don't think about it and make a conscious decision whether or not you're going to

Clint C. Galliano, REALTOR® (20:06)
evaluate all of the risk. All right, some things that buyers can do. Get a pre-purchase flood insurance estimate before writing an offer. Not during inspection, before the offer. Many local agents will run that for free. And that's something that I do is not just flood insurance, flood and homeowners insurance, but that gives me an idea of what the closing costs are.

Ben Harang (20:08)
Mm-hmm.

Mm-hmm.

Clint C. Galliano, REALTOR® (20:34)
And so

that factors into how we craft the offer.

Ben Harang (20:39)
Right. Ask specifically whether the current policy has lapsed at any point. A lapse breaks the continuity of the rate. So what we are seeing is that a lot of people that are not in the special flood hazard risk zones are dropping their flood insurance policies that had grandfathered rates.

Clint C. Galliano, REALTOR® (21:03)
I did.

Ben Harang (21:04)
And when those houses go to sell and,

the people want to buy flood insurance, they're going to the actuarially sound rates, which is the risk rating 2.0 premiums that people are gradually getting to over time over the next 10 years. You're going straight to that premium 10 years out in the future without a current policy. So if you think you're gonna sell your house and you have a flood insurance policy on it.

Think twice before you drop it.

Clint C. Galliano, REALTOR® (21:40)
All right, it's always a good idea to commission an elevation certificate if one doesn't exist or is outdated. It provides the data that feeds premium calculation, if and only if. Well, technically it doesn't feed the premium calculation, but if you can get a LOMA to get out of that special flood hazard area, it will impact what your monthly cost will be ⁓ for escrow on your house payments.

Ben Harang (22:08)
Mm-hmm.

Clint C. Galliano, REALTOR® (22:08)
if you're buying with a loan.

Ben Harang (22:11)
Right. And you need to factor in the flood insurance into the monthly payment calculations. For some properties, it can exceed the principal and interest payment. This should be in the buyer's numbers from day one. And it goes back to what I said earlier. Part of what we do is adjusting expectations. We don't like surprises. So the more we can do on the front end to

To anticipate what's coming, the smoother the transaction can go.

Clint C. Galliano, REALTOR® (22:38)
All right, negotiating around flood insurance costs. Flood insurance quote that comes in significantly higher than the seller's current premium is legitimate grounds for renegotiating the price or requesting seller concessions.

Ben Harang (22:55)
In some cases, yeah, it is. In some cases, the seller can transfer the existing policy to the buyer. ⁓ Preserving the current rate and phased increased schedule rather than starting fresh is worth exploring with the insurer during the due diligence process. But as we said, not all insurers are willing to transfer the policy.

Clint C. Galliano, REALTOR® (22:55)
valid point.

That's a valid thing to check. Most sellers are willing to transfer it. They check with their insurance company and that usually involves getting the agent in touch with the insurance company and then the buyer signing paperwork. As long as all of that is done prior to close, the premium, I'm sorry, the policy will transfer to the new owner. I've actually pulled that off 30 minutes before closing.

Ben Harang (23:25)
Mm-hmm. Right.

Mm-hmm.

Clint C. Galliano, REALTOR® (23:51)
signing at the title company and getting it sent to the insurance company so that they could cover it.

Ben Harang (23:51)
Right.

Okay, and this one's tough, but sometimes this is what happens. In some cases, the right move is to just walk away. A property with a flood insurance bill that doesn't work in the monthly payment system for you simply doesn't work, regardless of the purchase price. So sometimes the premium is so high, it just...

It kills the deal and the property is not worth buying.

Clint C. Galliano, REALTOR® (24:26)
All right, so we're going to give you a hit. It does. But, you know, it's like like I was talking about. It's almost like they were listening into a story I told last year. We had a I had a client that was looking at a house that was listed for seventy five thousand dollars. We got insurance quotes and the insurance on it was eight thousand dollars a year.

Ben Harang (24:28)
That one hurts.

Mm-hmm.

Clint C. Galliano, REALTOR® (24:53)
between flood, oh, I'm sorry, was closer to, it was almost $14,000 a year between flood and homeowners for a $75,000 home.

Ben Harang (25:04)
close to 20 % of the value of the property.

Clint C. Galliano, REALTOR® (25:07)
Exactly. They'd almost be better off just putting that money in a bank account or an investment account and use that to basically do like rich people do and self-insure. No, they won't.

Ben Harang (25:14)
Mm-hmm.

but the lender won't let you do that.

Clint C. Galliano, REALTOR® (25:25)
We're going to go into some practical workflows for the buying process. First part is due diligence checklist that's flood specific. So pull the FIRM panel for the specified parcel, not just the general map area. Flood.gov has a lookup tool where you can put in an address and it'll show you what that rate or what that map is and what zone it's in.

Ben Harang (25:52)
You want to check to see if the property has an elevation certificate on file. It's often with the parish records, with a building from a building permit or sometimes with the seller's insurance company. But having a certificate and an elevation certificate does help on occasion.

Clint C. Galliano, REALTOR® (26:13)
get flood insurance quotes from a licensed agent before making an offer, provide the elevation certificate if available, if not, get a preliminary estimate.

Ben Harang (26:24)
Ask the seller for five years of flood insurance renewal documents. This shows premium history and whether there have been any claims.

Clint C. Galliano, REALTOR® (26:32)
And while they're supposed to mark it on the property disclosures, it doesn't hurt to ask directly if the property's ever flooded. ⁓ asking always puts it on the table explicitly just because the seller may have overlooked that section of the property disclosure.

Ben Harang (26:51)
Yeah. I can't imagine somebody legitimately saying, I missed that section when the house flooded. but who, who knows? Another way to find out is ask the neighbors. They are so quick to throw people under the bus. They are so quick to say, yeah, that house flooded, but mine did not. so do you due diligence?

Clint C. Galliano, REALTOR® (27:06)
You

So you're there showing the house and the neighbor comes to walk across the street and says, so Ms. Shirley's selling her house, huh?

Ben Harang (27:23)
And did miss Shirley's house have a flood? Yeah. Yes, they will. Yes, they will. All right. What your agent should already know, which FIRM panel panels cover the property and what zone it's in.

Clint C. Galliano, REALTOR® (27:27)
Yep, they'll damn sure let you know.

whether the area has been remapped recently. A new FIRM can move a property into a higher zone mid-transaction.

Ben Harang (27:52)
Yes, it can. It can also change after you buy it. Which local lenders have experience with flood zone properties and won't get cold feet in underwriting?

Clint C. Galliano, REALTOR® (28:03)
That's a big deal for, or a big reason to use local lenders.

Ben Harang (28:08)
Yeah, people

around here don't, it doesn't bother the lenders.

Clint C. Galliano, REALTOR® (28:11)
Yeah, they're used to it. The other one is which local insurance agents specialize in NFIP and can run estimates efficiently?

Ben Harang (28:13)
Mm-hmm.

this is where hyper local expertise matters. An agent who works in Terrebonne and Lafourche regularly will have knowledge wire hardwired in their brain and out of town market age and out of market agent may not even know the right questions to ask to, quote a flood policy.

Clint C. Galliano, REALTOR® (28:44)
Yep, they can tell you about the different types of termite if they're out in New Orleans, unless they're familiar with the local area, they won't know.

Ben Harang (28:48)
Mm-hmm.

Clint C. Galliano, REALTOR® (28:55)
All right, first time move versus move up buyers versus investors. So first time buyers, they're often shocked by the total payment once flood insurance is added.

So we walked through the full.

principal interest, taxes, and insurance plus the flood number from the very first conversation. Like I said, we take that into account before we even think about making an offer.

Ben Harang (29:23)
And move up buyers. They may be from a home with a grandfathered rate. New property starts fresh. Expect a reset. Especially if you're buying a new construction maybe. You might be buying a DSLD house or something. If it doesn't have a flood policy on it and it's required, expect to pay the full premium.

Clint C. Galliano, REALTOR® (29:46)
All right, and if you're an investor, make sure that the flood insurance is a line item in your pro forma if you're buying in a flood zone or special flood hazard area. Underwrite it at the current quote, not at a historical rate or a guess. Get accurate numbers, but treat it as an expense item or a hard cost. It's not something that is likely to go away unless you aren't

Ben Harang (30:03)
Mm-hmm.

Clint C. Galliano, REALTOR® (30:12)
required to have and even then that's questionable.

Ben Harang (30:16)
Yeah. Okay. So as we wrap it up, we're to talk about some takeaways. The first takeaway is get the flood insurance quote before the offer. Find out what flood zone it's in and get the quote before you make the offer. It'll save everybody a lot of time and grief if you know what's going on on the front end. Treat it like a home inspection. It's a cost of doing business.

before you emotionally and financially commit it.

Clint C. Galliano, REALTOR® (30:48)
It can be as simple as a 15 minute call to a local NFIP agent before making an offer. It's the single highest leverage action that you can take in flood zone market.

Ben Harang (31:00)
Mm-hmm. And if an agent discourages the looking into the flood insurance premium or says it's not necessarily, that might be a signal that you might want to listen to.

Clint C. Galliano, REALTOR® (31:13)
Yep. All right. Want to reiterate, the seller's rate is not your rate, just because there's a flood declaration page for this year as part of the disclosures. That doesn't mean that if they transfer that policy, that's what your rate's going to be when it renews. It's paid out until the policy expires, but when it renews, it's going to likely be going up. You're probably looking at 20 percent.

Ben Harang (31:40)
Mm-hmm.

Clint C. Galliano, REALTOR® (31:42)
So grandfathering under the old systems largely gone, risk rating 2.0 rates face forward full risk over time and a new policy starts at the current rate. We've probably said that at least five times.

Ben Harang (31:58)
Yeah, so don't make any assumptions when it comes to flood insurance is what we're trying to say. Never budget based on a current premium shown in a listing or disclosure. Always get your own quote. That policy may have lapsed and any number of things could have happened though the insurer may not be willing to transfer it. So look into what your premium is going to be if you buy the

Clint C. Galliano, REALTOR® (32:22)
And this is one of the most consistent sources of post-closing surprise in South Louisiana real estate right now.

Ben Harang (32:31)
It is, it is. All right. Our third takeaway is work with people who know the specific market. An agent, lender, an insurance agent who work in Lafourche and Terrebonne Parish, and not just the general region. We have the knowledge that makes the difference. If you get somebody out Alexandria because they Susie's first cousin about her second marriage that you happen to know.

and they come down here and come into Lafouche and Terrebonne, it's a completely different world than in Alexandria. Be careful. You're better off with people that know the local market.

Clint C. Galliano, REALTOR® (33:10)
Flood zone real estate is not a place for generalists. The nuances of parish flood maps, private road access, and local lender appetite for flood zone properties are not things you can Google.

Ben Harang (33:27)
Right. had, I had somebody just private, private road access killed the deal before we got started. which is when it should kill it, shouldn't kill it at the end. so the right team costs the same as the wrong team. The difference shows up in what they know before you sign and buy the house. So again, get, get somebody, get somebody local that knows the local area.

Clint C. Galliano, REALTOR® (33:53)
So I think we kind of gave you a whole bunch of homework if you're considering buying property in a special flood hazard area. And even if it's not a special flood hazard area, flood insurance is an option. And the further north you go, the cheaper it is. So I just want to remind you all to like, subscribe, comment, and share.

wherever you get your podcasts and also at rerealestatepodcast.com or on YouTube. That way you can find out what we're saying. If this is the first time you listen to us, if you listen to us on a regular basis, hey, give us a comment, send us a question. You can go to rerealestatepodcast.com and ask a question and we'll get to it on a future show.

Ben Harang (34:40)
Okay, I think that wraps it up unless you have anything else to say Clint.

Clint C. Galliano, REALTOR® (34:45)
I think we got another one in the can.

Ben Harang (34:47)
All right. Have a good one.

Clint C. Galliano, REALTOR® (34:51)
Alright, You Too, Ben

Ben Harang (35:09)
Okay, a lot of what we do is managing expectations and if we have a conversation about flood insurance on the front end, or would zone the properties in, whether it's in a special flood hazard zone or not, and whether or not there's a flood policy in place,

The end result could be a fairly pleasant experience when you buy the house. It's when you get those five and $6,000 premiums that you had no idea were even a possibility that things go south. So talking about flood zones, Clint said most of LaFouche and Terrebonne in flood zones, I'm not sure most of them are, but a lot of them are. And people will say, I don't want to buy a house in a flood zone.

Well, the entire country is mapped in a flood zone. What they really mean is they don't want to buy a house in a zone where flood insurance is mandated as a condition of their loan. And that's typically, like Clint said, a financial decision on how much the premium is going to be. The whole system was based on elevation above sea level, which is probably an appropriate way to do it.

The new system, the little bit we can get out of them is proximity to a body of water. Well, in Lafouche and Terrebonne parishes, never, wouldn't the stones throw away from a body of water. That's the problem with the new risk rating 2.0 that went into effect in October.

2021 with renewals in April of 2022.