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Why is Private Market Flood Insurance so much less than NFIP / FEMA?

The Details

First of all, the NFIP is currently $25 BILLION dollars in debt! It is a government mandated program. Everyone has access to it. No matter how many times your home floods out and floats away, FEMA and the NFIP are there to bail you out and insure you again and again. How can any business model sustain this? The government keeps on bailing them out. NFIP is so expensive because we are subsidizing all of those other properties in Florida or along the Mississippi river that flood out every year. PMF carriers can be choosier as to what properties they will write. They have used satellite technology to map out every property in the country. They know exactly the elevation of your home and the chances it will flood.  They have developed sonar technology to be able to better price flood insurance. They rate based on the actual risk, not the area, flood zone or proximity to coast.
LiDAR satellite data integration

Many of our PMF carriers use LiDAR technology. This is the same technology used by NASA and the US government. LiDAR includes satellite and aircraft data integration. By imaging light detection and remote sensing radar, accurate digital land survey maps create a precise footprint of the earth. Light Detection and Ranging collects 3 dimensional points of the earth’s surface.  Airborne laser scanners shoot up to 400,000 pulses of light per second.  The laser transmits these pulses and then records the time delay to accurately calculate elevation values. The remote sensing technology can see through clouds, smoke or any weather condition to produce highly detailed, accurate images. This is possible by laser technology that blankets the surface of the earth and tracks elevation data points.  Better information helps our carriers identify the real cost of your insurance.

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