When it comes to flood insurance, disaster loans, and disaster grants. Being a member of the National Flood Insurance Program plays a vital role. We want to first discuss what is available by being a member of this program. Then we want to talk about the different statuses of the program. Then finally we want to discuss where you can find information your communities status.

 

Membership

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Being a member of the National Flood Insurance Program is not taken lightly. There are many flood plain management requirements that have to be followed in order to stay in the program. It can also be costly for smaller programs which is many reasons why many can not afford to participate.

So let's talk about what is available when you are a member of the National Flood Insurance Program. By being a member of the program it opens up the opportunity for

  1. Disaster assistance
  2. Disaster grants
  3. Disaster loans
  4. Flood insurance

 

Let's look at disaster assistance. Whether we are are discussing public or individual disaster assistance both are only available if you are a participating member of the National Flood Insurance Program. Public disaster assistance helps to reimburse communities to get public facilities repaired or replaced after a disaster.

Individual disaster assistance can help put residents into temporary housing after a disaster. It can also help provide medical resources that may not normally be available.

Stopping disasters like flooding from occurring again in the future is crucial for disaster recovery. There are some areas that are more prone to flood than others. This is one thing that Houston Texas has taught us over the last few years. When these disasters occur things like hazard mitigation grants can be made available to help buy out flood prone properties. This can help minimize damages in the future. These grants can also help pay for other projects that will help prevent communities from flooding in the future.

While grants and disaster assistance are not always available disaster loans can be a great resource as well. These are normally offered through the Small Business Administration. While they have a few restrictions one of the main ones is that the community must be a participating member.

One of the most important benefits of being a member of the National Flood Insurance Program is the availability of flood insurance for property owners. If a community is not a participating community then property owners may not have any flood insurance available. If they are a participating member they may have preferred and standard rates available based on the program status.

 

So what are the different statuses for a participating community. When it comes to the National Flood Insurance Program, there are tow types of status

  1. Emergency status
  2. Regular program

 

The Emergency Program is the initial phase of a community''s participation in the National Flood Insurance Program (NFIP) if no flood hazard information is available or the community has a Flood Hazard Boundary Map (FHBM), but no Flood Insurance Rate Map (FIRM). A limited amount of flood insurance coverage at less than actuarial rates is available for all residents of the community.

The community is required to adopt minimum floodplain management standards to control future use of its floodplains. Communities are converted to the Regular Program upon completion of a Flood Insurance Study and issuance of a FIRM or a determination that the community has no special flood areas.

So what flood insurance options are available to communities in the emergency program. As mentioned above some flood insurance is available to all property owners. However while in the emergency program preferred rated policies are not available. Below is a list of different coverages available in the emergency and regular program for the National Flood Insurance Program.

Building Coverage Emergency Program Regular Program
Single Family Dwelling $35,000 $250,000
2-4 family dwelling $35,000 $250,000
Other residential $100,000 $250,000
Non residential $100,000 $500,000
Contents Coverage    
Non Residential $100,000 $500,000
Residential $10,000 $100,000

 

 

 

There are alot of communities that are not a member of the National Flood Insurance Program. Below is a list that shows the number of communities per state.

  1. Alabama-61
  2. Alaska- 4
  3. Arizona- 2
  4. Arkansas- 89
  5. California- 5
  6. Colorado- 19
  7. Connecticut- 0
  8. Delaware- 3
  9. Flordia- 9
  10. Georgia-79
  11. Hawaii- 0
  12. Idaho-12
  13. Illinois- 121
  14. Indina- 71
  15. Iowa- 137
  16. Kansas- 85
  17. Kentucky-50
  18. Louisiana- 27
  19. Maryland-1
  20. Maine-27
  21. Massachusetts- 9
  22. Michigan-162
  23. Minnesota- 86
  24. Mississippi- 35
  25. Missouri-172
  26. Montana-9
  27. Nebraska-96
  28. Nevada-0
  29. New Hampshire-12
  30. New Jersey-6
  31. New Mexico-10
  32. New York-8
  33. North Carolina- 28
  34. North Dakota- 26
  35. Ohio-98
  36. Oklahoma-117
  37. Oregon-2
  38. Pennsylvania-43
  39. Rhode Island-0
  40. South Carolina- 30
  41. South Dakota-42
  42. Tennessee- 10
  43. Texas-135
  44. Utah-25
  45. Vermont-22
  46. Virginia-18
  47. Washington-15
  48. West Virginia-5
  49. Wisconsin-60
  50. Wyoming-13

There may also be some private flood insurance options available if your community does not participate they generally are limited because of limited data.

So now we have talked about the benefits of being part of the program and the different programs available, how do you find the status of your community.

 

Community Status Book

 

open book

FEMA has what is called a community status book. This book has alot of important information in it. It lists the following

  1. Community name
  2. County
  3. Initial flood hazard boundary map effective date
  4. Initial flood insurance rate map effective date
  5. Current effective map date
  6. Regular and Emergency program date
  7. If a community is tribal or not
  8. Total in flood program
  9. Total in emergency program
  10. Total in regular program
  11. Total In Regular Program with No Special Flood Hazard
  12. Total In Regular Program But Minimally Flood Prone.
  13. Total suspended from the regular program
  14. Total suspended from the emergency program
  15. Communities not in the program

 

 

So this status book holds some very important information which is important for understanding exactly what resources are available for you.

Let's discuss what some of the abbreviations for the program mean.

(E) Indicates Entry In Emergency Program

NSFHA-No Special Flood Hazard Area - All Zone C

(>) Date of Current Effective Map is after the Date of This Report

N/A -Not Applicable At This Time

(S)- Suspended community

(W) Withdrawn community

(M) No Elevation Determined - All Zone A, C and X

(L)- Original FIRM by Letter - All Zone A, C and X

 

When reviewing this report the things you want to pay close attention to are communities that are either suspended or withdrawn. These are communities that could pose a challenge with flood prevention resources and affordable flood insurance options for the community.

If you have further questions about this communities you can visit our website. You can also check out our YouTube channel or Facebook page where we do daily flood education videos.

Start My Flood Insurance Quote

 

Chris Greene

Author

Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation
flood@communityfirstagency.com

 

Late 2018 and early 2019 has shown us flooding can happen anywhere and anytime. Many parts of the U.S. had much larger amounts of snowmelt than in years past. As a result this caused widespread flooding in the spring through out the country.

Windbreak reflected on frozen pond in winter, northern Illinois

Many of these property owners impacted were not in high risk flood zones and as a result did not have flood insurance. So that poses the question can you purchase flood insurance in Minnesota just for wet season?

Business woman standing with umbrella data protection concept on background

If so then when is wet season?

In areas like Minneapolis and Duluth Minnesota wet season is considered November through March for snowfall and March through May for rainfall. However as 2019 showed us this wet season can easily extend into summer time.

 

The Central Avenue Bridge and skyline reflecting in the Mississippi River at night, in Minneapolis, Minnesota.

So why did this flooding occur in Minnesota?

As we mentioned earlier Minnesota experienced very large amounts of snowpack in 2019. So when the spring storms came through it increased the melting period from 2 months to matter of weeks. All this additional snow fall had no where to go and in some situations it was like icebergs floating down the Mississippi.

 

Snow-covered rocks in Minnesota

As you can see wet season can range depending on the circumstances. So let's get back to our original question.

Can flood insurance be bought just for wet season?

Yes flood insurance can be bought just for wet season in Minnesota. Let's talk about what the options are and what some additional fees might be.

When it comes to flood insurance in Minnesota there are two options available.

National Flood Insurance Program and private flood insurance

Let's look at the National flood Insurance Program's guidelines for doing a policy for wet season.

The National Flood Insurance Program requires payment in full on all flood insurance policies. They only allow a policy to be cancelled for a few reasons. They generally refer to this as rule 26 in their manual.

According to FEMA the following cancellation reasons are acceptable under rule 26.

  1. Building sold, removed, destroyed, or physically altered and no longer meets the definition of an eligible building
  2. Contents sold, removed, or destroyed
  3. Policy canceled and rewritten to establish a common expiration date with other insurance coverage for same building
  4. Duplicate NFIP policies
  5. Nonpayment of premium
  6. Risk not eligible for coverage
  7. Property closing did not occur
  8. Policy not required by lender
  9. Insurance no longer required by lender because property is no longer located in a Special Flood Hazard Area because of a map revision or LOMR
  10. Condominium unit or association policy converting to RCBAP
  11. Mortgage paid off
  12. Voidance prior to effective date
  13. Insurance no longer required based on FEMA review of lender s Special ’ Flood Hazard Area determination
  14. Mortgage paid off on an MPPP policy
  15. Insurance no longer required by the lender because the building has been removed from the SFHA by means of a LOMA
  16. Policy written to the wrong facility
  17. Continuous lake flooding or closed basin lakes
  18. Cancel/rewrite due to misrating
  19. Fraud
  20. Cancel/rewrite due to map revision, LOMA, or LOMR
  21. HFIAA Section 28 refund

 

Outside of these buildings being uninsurable most of these reasons have to do with mortgage companies. So what happens if you don't have a mortgage? Can you only buy flood insurance in Minnesota during wet season?

In many situations its challenging getting the flood refund back if a lender never required it. As we have gone through over 20 different reasons you can see there is no reason for cancelling a policy because coverage is no longer needed and there is no mortgage.

Now that we know how NFIP works on prorated cancellations during the west season. Let's look at private flood insurance.

Private flood insurance works differently than NFIP. NFIP is mandated by FEMA and private flood insurance guidelines are set by the individual company.

 

Private flood insurance does allow for policies to be prorated. If you have a mortgage they also have strict guidelines for cancellation, but let's assume there is no mortgage.

Can you cancel a private flood insurance policy after wet season if there is no mortgage?

While the short answer is yes, there are two things you need to understand

  1. Fees
  2. Minimum earned premium

Most private flood insurance companies charge multiple fees on a policy there are policy fees, broker fees, and even surplus fees. It's important to understand that if you are cancelling a policy midterm these fees normally are not refundable.

The next thing to look for with private flood insurance companies is minimum earned premiums.

What is a minimum earned premium?

This the minimum amount of premium the insurance companies keeps regardless of when the policy is cancelled.

Some common amounts are 25%, 50%, and a 100%. You want to pay close attention to these minimum earned guidelines before signing an insurance contract with a private flood insurance company.

We talked about the confusion of understanding exactly when wet season in Minnesota is and that it can widely range. This can make cancelling a flood insurance policy difficult because you want to protect yourself. This is also why we always recommend not cancelling a flood insurance policy. Most floods occur when most people are not expecting it.

If you have further flood insurance questions about exactly how to get a better understanding of flood insurance during wet season in . Minnesota then please visit our website. You can also check out our YouTube channel or our Facebook page The Flood Insurance Guru. We also have daily updates on our Flood Insurance Guru podcast as well.

 

Start My Flood Insurance Quote

Chris Greene

Author

Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation
flood@communityfirstagency.com

Lake life can be a great life, even if it is only part time. Many people live on this lake some full time and some part time. However what most people don't know is how this can impact flood insurance rates.

 

We want to discuss three things about flood insurance on Smith Lake in Alabama.

  1. How does residence type impacts flood insurance rates on Smith Lake in Cullman and Jasper Alabama?
  2. What flood insurance options are available in Cullman and Jasper Alabama?
  3. Who qualifies for the different options?
  4. How elevations are impacting your flood insurance rates

So how does this residency type impact flood insurance?

Well if you ask the National Flood Insurance Program it has about 250 things to do with it in Jasper and Cullman Alabama. You see if don't live in the lake house for at least 50% of the time then there is a $250 surcharge on your National Flood Insurance Program policy. While this surcharge stinks it can stink even more if you have multiple structures on the same property as your lake house.

So not only are you hit with these surcharges for each structure but you might be required to carry a flood policy on each structure depending on what the mortgage company requires.

Its not unusual for a bank to require flood insurance even if the main structure is not in the special flood hazard area. Unfortunately the National Flood Insurance Program only does one dwelling per policy.

So let's say you have 3 separate dwellings on the same property like a mother in law suite, then you would be looking at an additional $750 in non primary surcharges.

So is there anyway around these fees?

Not the with National Flood Insurance program but there is another option for flood insurance.

 

We have briefly discussed the National Flood Insurance Program which is the government funded flood insurance program. However what about private flood insurance.

What is private flood insurance?

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Private flood insurance is just like it sounds unlike the National flood insurance program which is provided by private insurance companies.

Let's discuss a few differences with these programs on the lake. First of all the National Flood Insurance Program only offers coverage up to $250,000 on the building and a $100,000 contents. Private flood insurance offers coverage on buildings into the millions and generally $500,000 on contents.

Another big difference between the two is private flood insurance offers additional living expenses and business loss of use.

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So if you use the lake house as a commercial property you might be able to get business loss of use which could help give you loss of income while it is repaired.

So is there just one private flood insurance option in the Smith Lake area?

Absolutely not there are multiple options available and it's important to understand that each uses different rating factors. However one thing they all have in common is no surcharges because a property is not being used a primary residence.

So who qualifies for these different flood insurance options on the lake?

Lets discuss 3 disqualifications for the National Flood Insurance Program first.

  1. If a property is in violation of the flood plain management guidelines then it would not qualify.
  2. Also if the property is completely over water annd was built after 1982 then it would not qualify. Other than these two requirements most properties
  3. If community does not partcipate in the National Flood Insurance program

So now that we know what disqualifies a property from the National Flood Insurance Program let's discuss some disqualifications for private flood insurance.

Private flood disqualifications

  1. Bank does not accept private flood insurance
  2. Property is on the severity loss property list

So why would a bank not accept private flood insurance? Well there could be a few reasons the first one might be if the loan type is a FHA loa.

FHA loans have their own guidelines when it comes to flood insurance. Currently in 2019 FHA only allows National Flood Insurance program policies. If you have a VA, USDA, or Conventional then private flood insurance should be acceptable by the bank as long as the policy states the following "This policy meets the definition of private flood insurance contained in 42 U.S.C. 4012a (b) (7) and the corresponding regulation:.

Now lets discuss the second disqualification for private flood insurance which is severity loss property.

What is a severity loss property?

Any building that has incurred flood damage for which:
a. 4 or more separate claim payments have been made under a Standard Flood Insurance Policy issued pursuant to this title, with the amount of each such claim exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000; or at least 2 separate claims payments have been made under a Standard Flood Insurance Policy, with the cumulative amount of such claim payments exceed the fair market value of the insured building on the day before each loss.

So we have discussed how residence type impacts flood insurance rates at Smith Lake, we have discussed what the flood insurance options are available in the area, and who qualifies for the different options. As a property owner at smith lake its important that you know how the flood insurance options.

Let's discuss how elevations could be impacting your flood insurance rates. As you have seen on smith lake most homes are significantly elevated from where the boat houses are located.

 

However if you haven't had an elevation certificate completed more than likely you are over paying for flood insurance or even paying for flood insurance in the flood zone.

Why is this?

Well FEMA bases its flood maps on parcels, so as far as they are concerned all these structures are at the same elevation. If you have spent anytime at Smith lake you know this is completely the opposite some times as much as 50-100 feet.

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Maybe you have further questions about flood insurance at Smith lake? If so make sure to check out our YouTube channel or Facebook page where we do daily flood education videos. You can also check out our podcast The Flood Guru.

Start My Flood Insurance Quote

Chris Greene

Author

Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation
flood@communityfirstagency.com