Flood insurance — just like any insurance policy — is bound to have a lot of documents attached to it. It's important to know the purpose of these. In this article, we want to talk about federal flood insurance and what the Federal Emergency Management Agency (FEMA) acknowledgment form is.

Everything You Need to Know about FEMA's Acknowledgment Form

Federal Flood Insurance

Communities across the whole United States have been getting a lot of changes when it comes to flood insurance on the federal side. This flood insurance is managed by FEMA and its most popular carrier, the National Flood Insurance Program (NFIP).

Since April 2022, the whole NFIP system has been moved to follow the Risk Rating 2.0 which changed a lot of things when it comes to flood insurance especially when it comes to premium rates. There are good, bad, and ugly changes with this update however some things simply don't change.

Federal Emergency Management Agency - WikipediaEverything You Need to Know about FEMA's Acknowledgment Form

Just, for example, the definition of flood still stays the same when it comes to flood insurance. If two parcels of land or two properties are impacted by water then this is the only time it will be considered a flood event.

Everything You Need to Know about FEMA's Acknowledgment Form

Another thing that didn't change is how both FEMA and community officials still require flood insurance for properties or sometimes even communities that are in a high-risk flood zone like flood zone A or flood zone AE.

So, if you're thinking of going through FEMA, this information is good to know. Don't worry, we have covered a lot of topics when it comes to FEMA and its changes on our website.

FEMA Acknowledgment Form

When purchasing flood insurance, it's basically tradition at this point that you receive an acknowledgment form of your policy. However, one question that policyholders usually first think of is if this is legit.

Yes, this acknowledgment form is legit and it serves as some proof that you have received a copy of your flood insurance policy. The thing about FEMA is that they don't just have the National Flood Insurance Program (NFIP) to help them support this new "equity in action" objective they have.

Everything You Need to Know about FEMA's Acknowledgment Form

What we mean by this is that due to FEMA being partnered with NFIP as well as Write-Your-Own flood insurance carriers, you may be able to see a different name that's not FEMA as your insurance provider. If you need to know more about Write-Your-Own (WYO) carriers, click here to go to our blog post on this topic.

Now, you might be wondering how you would be able to determine if the acknowledgment form is legit and valid. Well, here are something that you should be able to see with that acknowledgment form.

Declarations Page

This page — sometimes referred to as simply "dec page" — will tell you relevant information about the flood policy. The declarations page should include the name of the intended insured (usually the property owners' name), the property address being insured, the flood insurance carrier, and coverages.

Everything You Need to Know about FEMA's Acknowledgment Form

Before we move forward, it's important to reiterate that the flood insurance carrier isn't always the National Flood Insurance Program (NFIP) as the Write-Your-Own (WYO) carrier's name might be your insurance provider. The declarations page with your acknowledgment form should be able to inform and show you this information.

When it comes to coverage, on the other hand, we need to remember that when doing a flood policy with FEMA, there are some coverage terms and limits you need to know. This includes the $250,000 coverage limit for residential properties and this will only go higher if you're doing a commercial policy with a $500,000 building coverage limit. Regardless of the property type, only a $100,000 coverage limit will be provided for content coverage.

Everything You Need to Know about FEMA's Acknowledgment Form

But what else should you expect when receiving an acknowledgment form in your mail?

List of Flood Losses

Another item that you might be able to see whenever FEMA is sending you this form is the list of the flood losses that the insured property has. Now, this is important as this may also serve as an explanation for your rates considering the claims variable that Risk Rating 2.0 has.

This list helps determine what claims variable the property is in and also helps you understand the potential flood risk you might face due to the property's flood history.

Everything You Need to Know about FEMA's Acknowledgment Form

NFIP Handbook

Lastly, you should be able to receive what's called the NFIP Handbook.

The Federal Emergency Management Agency (FEMA) has a lot of terms and conditions when it comes to flood insurance. This also covers your coverages and aims to help you understand how flooding and flood insurance works.

Everything You Need to Know about FEMA's Acknowledgment Form

So these are the things you should expect to receive when you're getting that acknowledgment form from FEMA. Flood insurance can be complicated at times and we want to help you avoid all of this hassle. If you have questions on flood insurance, go to our Flood Learning Center where we try to answer all of your flood insurance questions.

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Ready to solve your flood insurance problems? Here are the steps you can take:

  • Fill out this form by clicking here.
  • Talk with our flood education specialist.
  • Get back to the important things in your life.

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We want to help simplify flood insurance for you so that you can find more time in enjoying life's beauty.

Flooding can start from anywhere even inside your own home. When floods happen, sometimes it's easy to assume that raising your home would easily be the best countermeasure, but did you know that you can still get flooded when all that water starts to cause a backup on your sump pumps?


In this article, we talk about Detroit's new basement backup protection program, how this impacts flood insurance, and what it does for homeowners across Detroit.

Detroit Basement Backup Protection Program

Detroit is currently implementing a way to protect homeowners from unwanted damages due to pumps going back up to residential properties. This new program involves at least 11 neighborhoods in Detroit and aims to provide a maximum lifetime limit per residential and non-commercial property which is $6,000.

How Detroit's Basement Backup Protection Program Help Flood Insurance

What can you use this coverage for? The $6,000 coverage is expected to be used for the following reasons according to detroitmi.gov:

  • Inspect sewer lateral service line with CCTV (camera)
  • Disconnect downspouts and install extensions at least three feet from the foundation
  • Install backwater valve only if sewer lateral service line is in viable condition
  • Install sump pump on properties where diversion is possible
  • Install backwater valve and sump pump with sump pump overflow

What It Doesn't Cover

Despite this additional coverage that the Detroit Basement Backup Protection Program has, it's still going to have limitations on what this new program is going to provide coverage.

It's important to note that this will not cover replacement or repairs for sewer lateral service lines from the house to the city connection, other private plumbing, existing backwater sump pump, and basement foundation or floor damages (pre-existing damages).

How Detroit's Basement Backup Protection Program Help Flood Insurance

This won't also cover reimbursements for any additional or alternative sump pumps and existing backwater valves.

Who Does It Cover?

At the time of writing, only selected areas in Detroit are eligible to get this new program. This is also strictly for residential non-commercial properties that are either a house or duplex homes, so it won't really be eligible if you have a commercial property.

You can read more about Detroit's new program here.

Impacts on Flood Insurance

Now that flood insurance is heading towards understanding risks as a basis for premium rates. This is especially true and noticeable with federal flood insurance under the National Flood Insurance Program (NFIP) and Federal Emergency Management Agency (FEMA) in their Risk Rating 2.0 program.

Usually, heavy rain can cause water backup and increase your risk of flooding. Get this to happen a couple of times and your flood risks will start to consider with your flood premiums.

This is why preventive measures against floods are key to saving yourself from flood damage and your finances from increasing premium rates.

Being eligible with the Detroit Basement Backup Protection Program means that you get to have other preventive measures. Although water backup is not covered by flood insurance, this means that you get to be sure that you will avoid water backup and reduce your flood risks.

If you want to understand your flood risks, click below to get us to help you.

Find My Flood Risk and Flood rate

Have other questions about flood insurance? Feel free to visit our Flood Learning Center where we try to answer all your flood insurance questions.

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Remember, we simply flood insurance through education and awareness, so that you can understand your flood risks.

Just a week ago, we've seen another case of flooding in Birmingham, Alabama. The city just couldn't get a break from floods.

Why Flood Insurance is Important for Birmingham, Alabama

In this article, we look back at the plans to lower flood risk in Jefferson County and help reduce the amount of flooding that happens in communities in Alabama. We also talk about how this can impact flood insurance in the long run.

Birmingham, AL Floods

Last week, a storm went past Birmingham, but it didn't leave without a mark. As water came down on the Saturday of July 9th, roads were easily flooded. This left a lot of drivers to find ways to navigate flooded roads.

This type of scenario isn't really new to Birmingham, Alabama. This is why National Weather Service (NWS) hydrologist Roger McNeil looked at the flood-prone creeks that easily help to flood in Birmingham and other nearby communities in Jefferson County.

These flood-prone creeks include the Village Creek in Birmingham wherein a $4.8 million project is planned to relocate sewer lines. It's important to note that the areas around the creek are in a high-risk flood zone which some would call the 100-year floodplain or flood zone A and AE.

The Five Mile Creek in the Ketona-Tarrant area however is still looking forward to getting financial help to mitigate flooding and reduce flood damage in the nearby communities around the creek.

These are just some of the areas that Roger McNeil found to have a high risk for flooding. If you want to read the full article, click here.

But how does this relate to flood insurance?

Flood Insurance in Birmingham, Alabama

One thing you'll be able to notice in these communities is that most of them are being put in a floodplain due to being close to a water source. This is one of the Federal Emergency Management Agency's (FEMA) flood risk factors that now directly impact your flood insurance premiums. This is through the Risk Rating 2.0 program.

More than the impact on premium rates, being close to any body of water speaks to your flood risks. We've seen this in the same article as businesses on Highway 31, that are close to Patton Creek in Vestavia Hills, are required to carry separate flood insurance. This is due to the fact that these businesses are in a floodplain or a high-risk flood zone.

These creeks in Alabama, especially in major cities like Birmingham, contribute to the increased flooding in the state.

Why Flood Insurance is Important

There is no other insurance that can cover flood damage. The fact that we're seeing increased flooding across Alabama shows that you don't need to be in a high-risk flood zone to get flooded.

Flood insurance can provide coverage for damages on both the building or the structure of the property and the contents and everything inside the insured property. Depending on where you're getting your flood insurance from, this coverage can be as high as $250,000 for building coverage with $100,000 for contents coverage.

Why Flood Insurance is Important for Birmingham, Alabama

But this is only applicable if you're buying flood insurance with the government-backed National Flood Insurance Program (NFIP). However, it's a different story when it comes to private flood insurance as they provide more flexibility when it comes to flood insurance policy coverage.

Watch the video below to see a more in-depth discussion of the difference between federal and private flood insurance.

Floods are becoming worse recently and are also becoming more frequent. Keeping a property without flood insurance is bound to really cause some big headaches. If you have questions on flood insurance in Alabama and Birmingham City, you can visit our Flood Learning Center by clicking below.

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Remember, we want to simplify flood insurance through education so that we can help you avoid problems and keep the value of your property long-term.

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It's the question that gets asked probably a hundred times a week. Insurance agents, property owners, and even banks want to know the answer.

Everyday we see FHA loans fall apart because of flood insurance. Many times flood insurance through the National Flood Insurance Program can be higher. Then you might have to pay the cost of an elevation certificate.

In 2019 FDIC made a major move in the industry when it started to allow private flood insurance.

People assumed this meant FHA would start accepting private flood insurance. However, because FHA insures loans they have different guidelines they do not accept private flood insurance. As of July 2022 FHA still only allows flood insurance through the National Flood Insurance Program, but hopefully, that will be changing soon.

On November 10, 2020 FHA made an announcement they were looking at accepting private flood insurance. They opened up a 60 day comment period for people to leave comments on this possible action.

So what happens next and what will be the impacts?


What's Next

After this 60-day comment period FHA will look at the comments and probably make a decision by the 2nd quarter of 2021. If they decide to approve it then they would probably delay it going into effect by 6 months. This is what FDIC in 2019.

So what could the impacts be?


The Impact

Well if you currently have an FHA loan then these could possibly cause a major decrease in your mortgage payment. You might see a 40% rate decrease in the private market.


However if this is passed don't go and try to jump to the private market right away.

FEMA has strict guidelines for cancellation. Unless you are refinancing your house you may not qualify until your policy is up for renewal.


In 2019 we saw a lot of people lose money because of FEMA cancellation rules. Many times private carriers require payment up front and charge minimum earned premiums.

This means you might be out 25% of the money you paid for a private policy because FEMA won't let you cancel.


We will continue to monitor this situation and continue to educate the public as this process moves forward. If you have questions about your flood insurance options then click here.

Want to learn more about flood insurance?

Check out our YouTube channel and Podcast.

Remember we have an educational background in flood mitigation which means we are here to help you understand flood risks, flood insurance and mitigating your property long term.


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Flood zone AE also referred to as the 100 year flood zone has the highest premiums other than coastal areas. These are generally because most of the structures have a negative base flood elevation. So what determines the premiums of these zones?

Well there are a few things that have a major impact on flood premiums in these zones. The age of the structure, the foundation type, flood loss history, and the elevation of the home.

Let's start with the age of the structure depending on when the house was built it will have a different rating model through FEMA. Its based on the first flood map for structure which generally occurred after 1978. If it was before the first flood map its called a PreFirm structure and if its after the first flood map its called a PostFirm structure. One of the big differences between these two types of structures is called grandfathering where you can keep the property in a preferred flood zone that no longer exists. This is allowed on PostFirm structures but not PreFirm structures.

The next thing that has a major impact on flood insurances rates in flood zone AE is the foundation type. Let's start with crawlspaces above grade compared to subgrade. Above grade is a crawlspace that sits above ground and subgrade is going to be crawlspace that sits partially below ground. The big difference here is subgrade generally will sit a certain level below the base flood elevation which increase the premium. While above grade sits above ground it could still be below the base flood elevation. The difference is things like flood vents can significantly lower the premiums with above grade crawlspaces.
The next type of foundation that will have a major impact on premiums are basements. As you can imagine basements can sit a good distance below the lowest adjacent grade creating a significant negative elevation. This can have a big difference on the rate so its very important to understand this when owning a house and purchasing a house. Also just because a basement is below grade does not mean that it is below the base flood elevation. Now that we have talked about foundations lets talk about how the elevation of the home in a flood zone Ae can impact the rate.The only real way to know this is to have a survey or elevation certificate completed. Now that we have discussed how the elevations of a home can have a major impact on flood insurance rates as you can see from the different foundation types.

Lets talk about positive elevations first and how they can have a big impact. The further your home is above the base flood elevation the better the rate is going to be. If all the elevations of your home are above the base flood elevation your home might even qualify for a letter of map amendment. This means that your property might be removed from the high risk flood zone and placed in a low risk flood zones causing a big improvement to property values. Now lets talk about the impact of negative elevations. As mentioned above basements can cause a home to have an extreme negative elevation. The higher the negative elevation a home has the higher probability of a flood occurring. This can create a double edged sword because the NFIP rates can be through the roof sometimes exceeding $10,000 a year for non coastal properties. However the other problem is the higher the negative elevation the less likely that a private insurance carrier will offer coverage on a property. So these are some things to think about when buying a home with a basement or building a home. we have discussed the impact foundation types can have on a structure lets talk about flood loss history.

Flood losses can have a major impact on a property. It could even stop a property from selling if severe enough. Generally when one flood loss occurs you would lose the preferred rating with the NFIP if you had one. Having a flood loss can also eliminate most of the private flood insurance options as most will not insure a property that has had a loss. However when the second loss and paid claim occur is when disaster can strike. This can turn a property into a severity loss property which has to follow certain mitigation guidelines in order to get insurance through the National Flood Insurance Program and private flood insurance is not available on these type of properties. This is why you should really review things closely before filing a flood insurance claim.

Have questions about flood insurance? Click the link below or visit The Flood Insurance Guru Find My Flood Risk and Flood rate

Your flood insurance quote just expired and now the rate is higher.


It would have been nice if someone told you this when getting the quote, right.


In this video, we look at how to help you solve this problem.


We look at the amount of time flood quotes are good for with different companies.


Watch this video and learn how to avoid paying more for flood insurance.


Buying flood insurance doesn't have to be complicated or confusing.  Our goal is to simply flood insurance and understand flood risks through education.

Flooding is the number 1 natural disaster in the United States. Today we are going to discuss 5 tips for buying flood insurance.  So the five things you need to know about are:

5 Tips to Buying Flood Insurance

Flood insurance policies are not all the same so it's important to ask the right questions.

1. Wait periods

Almost all flood insurance policies have some kind of wait period. There are different wait periods for each situation. Let's look at the National Flood Insurance Program (NFIP) first.

National Flood Insurance Program

There are three common wait periods with the National flood Insurance Program

  • Loan closings
  • New mapped policies
  • Standard wait periods

Let's look at loan closings first. Generally, if a property is requiring flood insurance for a loan closing this means that there is no waiting period. This means if a claim occurs a week after closing then you would have immediate coverage. It's important to know that in order for a claim to be paid out payment has to have been received.

Now let's look at newly mapped policies. These are properties that in the past were not required to have flood insurance but they are now because of flood map change. This is generally when a property is moved from a flood zone X to something like flood zone a or flood zone AE.

Watch the videos below to get an understanding of the different flood zones.


When it comes to newly mapped policies you are going to be looking at a 1 day wait period. So if the policy is set up today then it would be effective tomorrow. These types of policies had a larger financial benefit before the release of risk rating 2.0. This is because flood zones no longer determine flood insurance rates with the National Flood Insurance Program.

Now let's look at the standard wait period with the National Flood Insurance Program. The standard wait period is 30 days. So if we set up a policy today it won't be effective until 30 days from now. 

5 Tips to Buying Flood Insurance

Now you remember when we discussed no waiting period with loan closings? Well, there could be an exception if payment is not received within a certain time frame. If you are an insurance agent or an insured then you have 10 days to make the payment. If you are a mortgage company then you have up to 29 days to get this payment in. 


So what happens if payment is not received within that time frame?

Then you would have a 30-day wait period kick in from the date the payment is received. This is important to remember when you are talking about flood coverage, flood claims, or possible flood damage.

Private Flood Insurance

Now let's take a look at private flood insurance when it comes to flood insurance wait periods. Private flood insurance works completely differently than the National Flood Insurance Program. While they also do no wait periods for loan closings their other wait periods might range from 1 day to 15 days.

Each insurance company has different guidelines for their wait periods.

5 Tips to Buying Flood Insurance

2. Deductibles

Flood insurance deductibles are completely different than homeowners insurance policy deductibles. On a home insurance policy, you may only have one deductible. However, a flood policy could have three different deductibles. 

These deductibles could have some impact on insurance costs as well. The higher the deductible the lower the insurance premium could be. Let's take a look at where these different deductibles could apply:

The coverages above are the three standard coverages on a flood insurance policy. It's important to know whether you have your flood insurance directly through the National Flood Insurance Program or with a Write Your Own Carrier that additional living expenses are not currently an option. Currently in 2022 additional living expenses are only offered by private insurance companies.

5 Tips to Buying Flood Insurance

When picking these deductibles you want to add all three together because there is a possibility you may have to pay three deductibles at one time. This is one thing many people do not think about so instead of maybe a $5000 deductible they really have a $15000 deductible.


3. Will the Bank Accept the Policy

Every day we see property owners take out a flood insurance policy and we see the bank deny it. So why would they deny the flood policy?

This could happen for a couple of reasons, some are due to coverage amount and type of policy. Recently, we saw a bank deny a policy for one of the craziest reasons too much coverage. Yes, you read that right too much coverage.

This property owner in Vestavia Alabama was told by their bank they would only accept a policy for the standard $250,000. This customer wanted to insure the property for replacement cost coverage but was told they could not.

5 Tips to Buying Flood Insurance

Generally, when we see this happen it's because there is not enough coverage on the policy or at FEMA's max residential coverage of $250,000.

Now let's look at the type of policy.

If you are doing an FHA loan then, generally, they will not accept private flood insurance. This is where we see a lot of property owners get in trouble. They get a couple of days before closing and are told that flood insurance is not acceptable because it is a private policy. They call their insurance agent to get it changed and the flood insurance premium goes from $800 to $4200.

Why is that? Well, insurance companies look at flood risk differently. So when looking at purchasing flood insurance you want to make sure you inform your insurance company of what type of loan you are doing.

If they tell you it doesn't matter, then you want to find an insurance company that understands loan types and flood insurance options.


4. Difference Between NFIP and Private Flood

When purchasing flood insurance you want to make sure whoever you are working with has access to private flood insurance and flood insurance through the National Flood Insurance Program.

There are a lot of differences between these two. Until risk rating 2.0 came out one of them was an elevation certificate might have been required. 

Some of the other differences are how flood zones are viewed. Flood zones have minimal impact on rates in many situations. Instead, a flood risk score and the actual flood risk are used with other factors to determine flood rates.

You can find your flood risk score by clicking here.

Get Your Flood Risk Score Here!

Pricing might be one of the leading differences. Over the last 10 years, private flood insurance has shown to be much less in high-risk flood areas and high-risk flood zones. One reason for the pricing difference was also building occupancy.

The National Flood Insurance Program charges a $250 surcharge if a property is not a primary residence while most private insurance companies do not.

5. Mid-Term Cancelations

Cancelations have become a major talking point with flood insurance. One reason is a few years ago FEMA stated they would allow mid-term cancelations and then changed the bulletins. 

Most property owners think flood insurance is just like homeowners insurance on this topic. While flood insurance companies are very strict on mid-term cancelations.

5 Tips to Buying Flood Insurance

There are about 28 different FEMA cancellations, but for this one, we are going to discuss the top 3 most popular reasons that will be approved for a policy to be canceled mid-term.

  • Flood map change
  • Property sold
  • Mortgage no longer requires insurance

5 Tips to Buying Flood Insurance

Flood map changes are very common across the country they are constantly happening. When a property goes from a special flood area to a minimal flood area this qualifies for a flood map change. However, this does not mean that things like heavy rains won't cause flood water to enter your property.

5 Tips to Buying Flood Insurance

The next popular reason for a flood insurance policy to be canceled is if a property is sold. Generally, when this happens a signed cancelation letter and a closing settlement are required to get the flood policy canceled. The rule of thumb with most carriers to get a refund out is 30 days.

It's important to know that refunds could be different if it is a private flood insurance policy. You want to pay attention to if fees will be refunded or just the base premium.

5 Tips to Buying Flood Insurance

The last most popular cancelation reason is if a mortgage is paid off. if this happens you simply need to submit a signed cancelation letter and a letter from the bank showing they no longer require flood insurance.

5 Tips to Buying Flood Insurance

So these are the 5 tips to buying flood insurance. If these tips had been available when I was purchasing flood insurance then I may not have had the trouble I did. However, that might mean that we would not have been committed to flood education as we have for the last 10 years.

If you want to learn more about flood resources make sure to check out our learning center here.

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If you want to review the best flood insurance options then click below.

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Remember we are here to simplify purchasing flood insurance and understanding flood risks through education.


pelham al home buyers beware

Hello, Chris Greene, with the Flood Insurance Guru here, where we have an educational background in emergency management with a specialization in hazard and flood mitigation. So we can help you understand your flood insurance options, how to minimize your flood risk, and possibly even how to get your flood zones changed. Today we're going to be talking about the major impact that the new flood insurance rates to the National Flood Insurance Program are going to have in areas like Pelham, Alabaster, and Helena Alabama.
Effective January 1st, 2019 the National Flood Insurance Program has put in some rate increases. Today we're going to talk about those rate increases when it comes to residential properties, investment properties, secondary properties, lake properties, second homes, commercial properties, properties that have been newly mapped to a new high-risk zone, and preferred policies.
So the first thing we're going to talk about is a primary residence. This is going to be your primary home. Let's say you have a policy now through the National Flood Insurance Program. It costs you $1,000 a year. You're looking at a 7.2% rate increase this year, effective January 1st, 2019, which is going to have an impact on you of about $72 a year, which isn't too bad. The big impact is going to be in areas like secondary residences, and commercial properties like we've mentioned. These areas are having a 24.2% rate increase. So let's say that you have a rental house that you're renting out, and it can't be considered your primary residence. If your flood premium is $2,000 a year then you are looking at almost a $500 rate increase per year, and that's just this year. So this could have a big impact on the profitability for a rental house.
Some other areas. Let's say you have a commercial business that has to have flood insurance and your flood premiums are $2,000 a year, you're looking at almost a $500 per year rate increase, for this year. The good thing is on other things like your preferred policies or zone X It's only having a 1%. So on a $1,000 premium, you're literally talking about a dollar and that's it, which is great news for these areas.
Remember, minimal risk areas or zone X generally have flooding 30% of the time. So just because you're in that low-risk zone doesn't mean you don't need flood insurance. It just means that FEMA has not determined it to be a high-risk area, and has not determined the base flood elevation. Other areas where you're going to see a rate increase are what's called newly mapped areas.
So let's say that a property is mapped to a flood zone AE, which is a hundred-year flood zone out from a flood zone X. Of course, during the first 12 months, you can take advantage of new mapping rules, which basically give you that preferred policy rate for the first 12 months. Well, you're going to see a 15% rate increase on those policies now. Now also remember that rate is only good for the first year, and that is there to help you adjust to what your flood premium's going to be. So it's very important that you look at these things.
It's also important that you understand the private flood insurance options and all your flood insurance options overall in Pelham, Alabaster, Helena, Alabama all these different areas where you're going to start seeing a lot of these flood rate changes. 


Remember we simplify flood insurance and understanding flood risks through education. If you want to learn more about flood education please visit our learning center by clicking below.


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Find all the Pelham flood insurance options

In this article, we want to talk about escrow billing nightmares from both the National Flood Insurance Program (NFIP) and the Private Flood Insurance Program. We discuss what you need to know about escrow billing flood insurance. We discuss how flood insurance claims might be covered if payment has not been received.

Flood Insurance: Escrow Billing Nightmares

We want to focus on everything that you should know to ask as a mortgage lender, an insurance agent, and as a property owner.

You could also listen to our podcast below while you read.


Everything NFIP

The insurance company that falls under that federal side of flood insurance is managed by the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

As you know by now, even with the Risk Rating 2.0 update, you will still find about a maximum of $250,000 for building coverage and $100,000 in contents coverage for flood loss with the NFIP and FEMA. For commercial properties, the building coverage maxes out at $500,000.

Flood Insurance: Escrow Billing Nightmares

Paying with Mortgage

It's important to point out a few things you need to know when getting your federal flood policy signed especially if you're paying it out of a mortgage loan or escrow payment.

One of these things is that you won't really be getting a declarations page or the actual policy with the National Flood Insurance Program right away. As a result, the signed application can serve as your proof of coverage for up to 29 days.

What does this mean?

Simply put, your mortgage company has 29 days to make a payment for your flood policy's insurance premium before the 30-day wait period kicks in. Think of this as a form of grace period for your mortgage company to pay your flood insurance premiums.

Flood Insurance: Escrow Billing Nightmares

REMINDER: The 29 days will only be for the payment of the policy. There will still be a 30-day waiting period for the actual flood insurance policy to be available.

What if you missed this grace period for your mortgage company to pay your flood insurance?

Well, because of the NFIP's strict guidelines, coverage would not start for 30 days. You might get set back when it comes to both your building and personal property coverage if this payment wasn't made in time because once payment is received after the 30th day is when the 30-day waiting period starts.

Paying Directly as an Agent or Insured

Now, when paying as an insurance agent or maybe you want to pay it out of your own pocket as a property owner, you will only get a 10-day period to pay your policy. The same thing goes, if you miss this 10-day period, your coverage will not start for 30 days.

Flood Insurance: Escrow Billing Nightmares

What If a Claim Occurs?

Let's keep it simple, so long as you made your payment before a claim occurs, you will get the respective coverage written in your flood insurance policy.

Equally, this means that if your mortgage company missed the 29-day payment period, then you will not get any of the coverage you have with your policy until the payment is made.

It is only AFTER payment is made will you be able to get coverage for your flood insurance claims.

Flood Insurance: Escrow Billing Nightmares

Everything Private Flood

So you might be wondering, what about the private flood insurance carriers? Where do they stand on this topic?

Well, it's important to note that just like their flood insurance coverage, payment terms when it comes to escrow billing or escrow account may vary from one private insurance company to another.

This may mean that you will be able to get only 10 days to make a payment up to 15 days. This is regardless if you're paying through a mortgage, an insurance agent, or out of your pocket.

Again, this really depends on the private insurance carrier that you applied with, so it's important to really know the guidelines that your private flood carrier has when it comes to these types of concerns.

Flood Insurance: Escrow Billing Nightmares

What if a Claim Occurs?

Private flood insurance has different standards and guidelines when it comes to payment and flood policies. So you might be shocked to know that some private flood insurance companies will outright reject or deny a claim if it's made before payment is made.

Yes, that means that you won't get any of the coverage with your policy if there was no payment before the flood claim was filed. This is why we highly recommend that you pay your flood insurance premium upfront, as hard as it may be, to avoid this type of situation.

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As an insurance agent, it's important to know which carrier has these guidelines or simply know the guidelines of the carrier that your client is going for. This really helps you, as an agent, avoid E&O Claims since you get to inform your client everything about their flood insurance carrier.

Flood Insurance: Escrow Billing Nightmares

In our experience, we've had many clients file flood claims two weeks and even two days after closing. Thankfully, they get coverage for the flood loss because they were able to get the payment made before these claims.

If you want to know more about the differences between the NFIP and Private Flood Insurance, watch our video below:

So if you need assistance with these payment guidelines for your flood insurance, so you can make sure that you have coverage on your property, understand flood risks, or anything about flood insurance, click below to reach us.

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The private flood insurance market is getting a huge paradigm shift in the next month. Assurant, Inc. reported that starting May 1st, they will no longer offer private primary flood insurance for residential properties.

Let's talk about this change, its impacts on more than 1000 policyholders, and what you can do to adapt to this change.

             Assurant Flood Insurance

Recently, we received important information regarding private primary flood insurance policies and one of the leading insurance options, Assurant Incorporated.

According to the carrier, they will discontinue providing primary flood insurance for new business policies starting on May 1st, 2022. This will impact all residential flood insurance across the country and will be experiencing this change.

Now, an important note here is if you have an active policy, you will be able to get coverage from it until it expires. However, people who are looking to buy residential flood insurance (called "new business") won't be able to get a policy from Assurant Inc for primary private flood insurance.

There will also be no renewals after July 1st, 2022. This is what we call a nonrenewal of flood insurance. Although the reasons for this change are something yet that we will have to find out, these changes are happening on the dates mentioned.

Keep in mind that this won't be impacting private commercial flood insurance, NFIP policies, and excess flood insurance with Assurant. This change is directly impacting only primary residential flood policies with the carrier.

What Happens Next?

All policyholders and agents will receive a non-renewal notice between 60 to 83 days from renewal or the expiration date of your current policy. This notice is expected to arrive via mail and servers as a heads up for you.

It's important to mention however that during this period, Assurant Inc. won't be leaving without any help. One of the great things about flood insurance the carrier is that they don't leave you behind. Once the nonrenewal mail is sent, Assurant will also provide a federal flood insurance or National Flood Insurance Program (NFIP) quotes will be provided via email to those who are impacted by this.

This is simply to ensure that you will have someplace to fall back on once that nonrenewal kicks in. It's important to note however that even if you accept this quote, you will still need to follow the 30-day waiting period from the Federal Emergency Management Agency (FEMA) and the NFIP.

If you want to see the list of the policies that are nonrenewing, you will have to contact an Assurant representative or coordinate with your insurance agent in doing so.

Now, let's talk about your options from both the federal government and other private insurance companies to adapt to this change.

Federal Flood Insurance

One of the key takeaways we got from this notice is that Assurant will be providing an NFIP policy if you have a residential property impacted by this nonrenewal.

It's important to mention here certain terms that you need to expect when moving from a private flood insurance policy to an NFIP one.

The NFIP policy, as mentioned before, will have to follow the 30-day waiting period as part of the term when purchasing flood insurance from the federal government. Despite Assurant's endorsement of your policy to be moved to the NFIP, this waiting period will still kick in.

The National Flood Insurance Program (NFIP) recently completely moved into the Risk Rating 2.0. The Risk Rating 2.0 will still follow the standard flood insurance coverage that you normally get with the NFIP's residential policies. This simply means that you will only get up to $250,000 for building coverage and $100,000 for content coverage.

This also means that your policy will be rated according to FEMA's Risk Rating 2.0 method which removes the flood zone as a basis for rates to acknowledge more on your property's flood data such as the history of flood damage, flood claims variable, type of floods that the property experiences, frequency of flooding, first-floor height, foundation type, and construction. This could very well mean that your flood policy will find a significant increase as we've seen with Risk Rating 2.0's impact across the country.

So these are some things that are going to really significantly change when it comes to your flood insurance especially when it comes to your rates. 

 One Private Insurer to Another

Now, it's important to also mention here that you can also go to another private insurance company, especially if the coverages that the NFIP is offering are not really enough. We do encourage that you get at least 80% of your property covered by flood insurance.


You can get a quote from your flood insurance agent from other private carriers. Again, it's essential to always set your expectations right. If you have a relatively cheap flood insurance premium with Assurant, it helps to set an expectation that this may not be the same.

Going through a private carrier means that there will be different flood coverage limits. This means that you won't really max out your coverage for building and personal property at $250,000 and $100,000 respectively.

Most private carriers also have an established system that determines your rate based on the risk of flooding that your property may have.

It's important to note however that depending on your loan type on your house, private flood insurance might not be available for you.


If you want to learn more about flooding and flood insurance visit our learning center below.

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