Flood Insurance Related Questions

Q: What is Flood Insurance?

A: Flood insurance is a type of property insurance that covers a residence for losses from water damages, usually due to extreme weather, groundwater builds up, or other causes of floods.

Q: I already have homeowners/renters’ insurance, am I covered?

A: No, flood insurance coverage is different from homeowner’s insurance and what is covered differs. Check your homeowner’s insurance provider to be sure, but typically flooding is not covered.

Q: How does Private Market Flood Insurance differ from NFIP?

A: Flood insurance can be either purchased through the National Flood Insurance program/FEMA or directly from private carriers. They are the same policy, underwriting and claims adjusting. There are sometimes extra coverages that the Private Market can add to their policies that is not available through NFIP. The rate is typically a lot lower.

Q: What are the coverage limits for our Private Market Flood Insurance?

A: Limits are the same as NFIP. Maximum for a home is $250,000, $100,000 contents. The coverage for maximum commercial property is $500,000.
You can purchase Additional Living Expense through the Private Market.
You can also purchase “Excess” limits over and above the $250,000 or $500,000.

Q: Will Federal Disaster Assistance pay for flood damage?

A: No, not necessarily. Federal Disaster Assistance is only available when a Presidential Disaster Declaration is declared. Most flooding events do not result in this declaration. If it is declared, the aid is commonly a form of low-interest disaster loans that must be repaid.

Q: Is Private Market Flood Insurance affordable?

A: Yes, we offer policies that can be more than 50% less in some cases.

Q: What is covered in my Private Market Flood Insurance policy?

A: PMFI policies are the same policy as NFIP and better. You can add Additional Living Expense/Loss of Use to a PMFI policy. This coverage will help pay for any additional living expenses you have after a loss, such as staying in a hotel for a month while your home is being repaired.

Q: When does my policy go into effect?

A: In most cases, there is a 30-day waiting period.  In the Private Market, the policy will go into effect 15 days from the date of application. If you are buying a home and have a bank loan, there is no waiting period. If you have an existing flood insurance policy, there is also no waiting period.

Q: How do I switch from NFIP to Private Market Flood Insurance?

A: Simply contact us and we will happily help you through the process.

Q: What are the costs of Private Market Flood Insurance policies?

A: We have seen rates 25-75% lower than NFIP.  However, we do run into situations where NFIP is a better option.

Q: What Private Market Flood carriers do we use?

A: Policies are placed with and are underwritten by select insurance carriers who have maintained an AM Best rating of no less than “A or A-” (Excellent).

Q: Can I cancel my NFIP policy mid-term?

A: Yes, you can cancel your current policy and receive a pro-rated return premium for any unused portion of the premium.  Your mortgage company has to provide a letter stating that they will accept a Private Market Flood policy.

HOWEVER… Because of the government shutdown. NFIP carriers have NOT been allowing mid-term cancels

Q: Why isn’t every insurance agent jumping on the Private Market BANDWAGON? 

A: Several reasons…

KNOWLEDGE: Not every agent is well educated in flood insurance. This stuff is not easy! We have learned from the greatest minds in the industry.

MARKET: We have over a dozen markets that we use to find the best policy at the best price.

INCOME: Agents simply don’t want to reduce their income. Half the premium for half the commission equals huge losses to agent income! For us… It is all about saving people money. Why should people be subsidizing homeowners in different parts of the country? The savings that we are seeing are incredible!  We recently saved a non-profit business $23,000 on their policy. Imagine losing that commission! Now imagine what that non-profit can do with an extra $23,000!

PASSION: Nothing makes my day more than to save a homeowner or business thousands of dollars or help a real estate agent finally sell a coastal property, or help a homeowner afford buy their dream home on the water, or allow an elderly couple to keep their home because they can afford the flood insurance. This is why I get up every day! I love what I do, and I love seeing the faces of the people that I help. This is why most every real estate agent along the SouthCoast has my phone number on speed dial!

Q: what are the issues with the nfip?

A: Well, where do we begin….

  • Government Flood insurance written through NFIP and backed by FEMA is MASSIVELY subsidized.  Homeowners in coastal areas screamed bloody murder back in 2012 when the government tried to charge the full rate for each risk. Congress reversed itself in 2014.  They limited the increases to 25% per year. The NFIP program is currently over $25 BILLION in the hole. That was before all the flooding and hurricanes of 2018.
  • It is only going to get worse!  The National Oceanic and Atmospheric Administration (NOAA) states that global sea levels are going to rise between 1-3 feet this century. They also say that climate change will contribute to more storms and flooding.
  • The premiums charged by the NFIP do not correlate with the risk. We are essentially subsidizing risks in more flood prone areas such as Florida, Louisiana, and Texas.
  • The current flood maps are in dire need of updating. This is done by Congress.
  • NFIP policies do NOT include coverage for additional living expense.  If you need to move out of your home after a flood while repairs are being made, you need coverage for additional living expense. Private Market policies include this coverage.
  • It is simple mathematics. The NFIP model simply cannot sustain its current model. How big of a deficit will finally break the back of the program?
  • The Private Market insurers can rate each property based on the individual risk and NOT try to subsidize the homeowner that lives on the Mississippi River whose home floods every few years and collects a large check.
  • Is the Private Market new? NO… They have been around for decades writing private and excess flood.  Only recently in 2015 have they been accepted as a replacement option for NFIP. Congress is making it easier and easier to write your flood insurance in the Private Market.
  • In October of 2018, Congress allowed pro-rata (mid-term) cancellations of NFIP policies so homeowners can switch and save in the Private Market.
  • NFIP may eventually cease to exist and the Private Market will fill in.

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