We were looking at buying some mobile home parks in Kentucky and found out that they were in a 100 year flood plain. Kentucky has a lot of rivers and lakes, so it’s not uncommon for properties to be in a floodplain. A 100 year floodplain literally means that there is a chance that the area will be flooded once every 100 years. You might think those are pretty good odds, but appreciating the risks and precautions to take are in your best interest.
Understand Base Flood Elevation
Base Flood Elevation is the expected level of water in a flood. It’s measured in terms of elevation above sea level. For instance, a base flood elevation of 600 feet means that when there is a flood, the water level is expected to be 600 feet above sea level. Just a slight variation from the base flood elevation makes a huge difference. A home located just a foot above the base flood elevation at 601 feet will be much safer than a home at 599 feet.
Even though a property is located in a flood plain, mobile homes can nonetheless be safe from flooding because they are usually 2-3 feet higher than ground level. That extra elevation could prevent homes from flooding.
FEMA often requires mobile homes in floodplains to be elevated. In many parks you will see that new homes are elevated as required, but older homes are simply grandfathered in. Best practices should include simply asking tenants if their homes have flooded.
Flood Policy on Mobile Homes
If a resident owns a mobile home and has a mortgage on it, they are required to carry a flood insurance. If the home however is owned free-and-clear, they may not carry insurance so requiring it may be a good rule to have in the park if you can.
Loss of Income Insurance Policy
Nowadays, few insurance company provides economical loss-of-income related to flood. The policies exist, but cost is prohibitive.
Flood insurance to replace damaged property is not too expensive, but the cost is going up.
Interestingly, the cost of flood insurance is cheaper when tenants buy them individually as opposed to the mobile home park owner. That’s due to some subsidies favoring individual homeowners.
Worst Case Scenario
The worst case scenario is likely that your park floods damaging the homes rendering them unlivable so tenants move out. You didn’t have flood insurance so you have to pay to remove and replace the homes and the tenants. If the flooding worsens, FEMA can actually require you to condemn parts or all of the park.
Thank you Kurt Kelley at Mobile Insurance for sharing his thoughts and experience!
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