Is Your Minneapolis Duplex In A Flood Zone?

The other day Minneapolis duplex buyers asked if I knew how the property being a 7 out of 10 as a flood risk would impact owning it.

That’s considered at a high risk of flooding.

I asked where they found this information, as it wasn’t on the MLS. Of course, the answer was Zillow.

Zillow has an arrangement to obtain a property’s flood risk data from a company called First Street Foundation. This company takes historical data on floods, fire, wind, air (quality) and heat, couples it with climate change data, and forecasts where there may be issues in the future.

Historically, insurance companies have looked at FEMA flood zones which are determined by historical data for flood risk.  However, they too have begun considering data produced by First Street Foundation and other companies like them as well.

Perhaps they should. As the buyers and I stood in the duplex’s back yard, we quickly realized what the problem was. On each end of three blocks of alley, the road went up. Every building in the area was as if it was sitting in the bottom of a bowl.

Given recent flooding in Texas and New Mexico, it’s on all our minds.

So where can you get flood insurance?

The National Flood Insurance Program (NFIP) is administered through FEMA and offered by insurance agents who offer these policies. Given that it’s administered by the government, this has several challenges. First, it tops out at a building value of $250,000 and $100,000 for personal contents. It does not cover living expenses or loss of rental income. Perhaps worse still, the claims process can be slow.

Private flood insurance may be available through either private flood insurance providers or obtained by bundling with an existing policy. Private flood coverage may be more expensive, but it also offers higher limits on building value, and your insurance agent may be able to structure it so you’re covered for loss of income in the event the building becomes uninhabitable.

Of course, a duplex owner’s policy doesn’t cover tenants belongings. They too should consider obtaining insurance, especially if they live on the ground floor or in a basement unit, are in a flood-prone area, or are in a multifamily property that may not have building-wide flood coverage.

For property-specific answers, it’s best to call your insurance agent. After all, the worst time you realize you need flood insurance is when your duplex is filling with water.