This is no April Fool's joke, but a big change is coming to the claims process and rating for federal flood insurance.

In this article, we want to discuss the changes to the claims variable and how your flood insurance premiums are going to be impacted by the new claims rating system with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP). We want to discuss three (3) things that you to know about this upcoming change to flood insurance on April 1st, 2023.

Flood Insurance Claims

First, let's cover how flood insurance claims can impact not only your flood insurance policy but also how risks are viewed for your property or home.

When it comes to the federal side of flood insurance under the National Flood Insurance Program (NFIP), flood claims can directly impact your rates. This happens in two forms with Risk Rating 2.0: the Severe Repetitive Loss (SRL) and the Claims Variable. As a policyholder, it's important to keep in mind these keywords.

The Severe Repetitive Loss (SRL) list for properties indicates that the property has filed more than one flood claim in a 10-year period. Generally, this indicates a higher risk for flooding and will in turn impact the flood insurance premiums of a certain policy.

The claims variable on the other hand is the newer claims rating factor that was introduced with Risk Rating 2.0. Initially, this new system will clean the policyholder's flood claim history and start from scratch.

However, if a claim is filed and paid out, the policyholder will see a potential increase in premium rates as FEMA will conduct a 20-year lookback where they will count all of the flood claims made during that period. This claim variable will produce a number that becomes a multiplier for the rates and is dependent on the number of claims made during that period.

But what are the coming changes to claims with FEMA for April 1st, 2023?

3 THINGS CHANGING WITH CLAIMS

1. 10-YEAR WINDOW & CLAIM DATES

One of the big things to have changed when it comes to federal flood insurance claims rating factor is dates.

Previously, if you were to file a claim under Risk Rating 2.0 with FEMA, they will start to do a 20-year lookback which means that they will look at all the claims made on the property for flood insurance for the past 20 years. The number of claims made will be used as a claim variable which acts as a multiplier for your flood insurance rates.

This lookback is changed to only do a look back for 10 years only. This can make it easier for property owners to avoid a higher claim variable.

Another change that involves dates is more focused on when FEMA's claim rating factor kicks in. Previously, any and all claims made during Risk Rating 2.0 will immediately trigger the claim review. These claims may be from any time prior to April 1st, 2023.

Basically, all of the claims made in the past 20 years regardless of the date will be sent as part of the review. Generally, this could also mean that there will be higher rates due to having a higher claim variable. 

For this new update, you will have to file a claim on April 1st, 2023, or later for the claim review triggered. This simply gives more leniency and a chance for property owners to get more breathing space before claims impact their rates.

This is important because...

2. WHAT TRIGGERS THE CLAIM REVIEW

Before this upcoming update, even if you file just a single claim during Risk Rating 2.0 — which means any flood insurance claims made before April 1st, 2023 — will immediately trigger the review. This can really hurt especially with how flooding behavior has changed in the past decade.

With this update, you will now have to file 2 claims within this 10-year period for the claim review to be triggered.

We recently had a customer who had these troubles with the previous system where they had two flood claims made in the last 20 years but only one in the last ten years. In the Risk Rating 2.0 claim review, this meant that both claims will be part of the claims variable however with this update, only one of them will be considered. 

3. WHAT CLAIMS ARE EXCLUDED

Let's move into another category in this update which concerns more about what types of claims are excluded in the Risk Rating 2.0 review and which ones are excluded in this April 1st, 2023 update.

Previously, the only exclusions are for Increased Cost of Compliance (ICC) and Closed Without Payment (CWP). So this meant that if you filed a Loss Avoidance Claim, you will see this included. Generally, this meant that the previous system also uses Loss Avoidance Claims to trigger the claim review.

With this new update, Loss Avoidance Claims will be added to the exclusions. These are claims made for helping your property avoid damage from flooding which includes things like sandbagging, and creating temporary levees, or water pumps to name a few. Generally, this goes around for $1,000 with a standard flood insurance policy.

So you can imagine that if these are still to be included with the rating factor for claims, it could really become a burden for policyholders, but that won't be the case anymore.

You can see the full breakdown of what we discussed here:

These are the upcoming changes to how flood insurance claims work with federal flood insurance. If you are ready to take the next steps to get the right flood insurance coverage then there are three simple steps.

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

Got more flood insurance questions? Visit our Flood Learning Center below to know more:

As we start to move out of the winter season little by little and temperatures start to rise again to welcome spring, some communities are facing big concerns when it comes to snow piles. One of these areas would be Weber County's Eden city in the state of Utah.

In this article, we talk about what's going on in Eden, Utah, and why snow piling up is creating one of the biggest risks for flooding during this season.

NORTHERN UTAH FACES SNOW PROBLEMS

Residents and locals of Eden City, Utah face big concerns with the snowfall amount this week. According to one resident in the city, they received at least 3 feet of snow just this week. This rings true especially when you look start to look at the Snowbasin Resort which received 33 inches of snow in just 24 hours. 

For some residents, this winter is considered to be the worst. So, how does snow impact the potential for flooding the community of Eden?

SNOW AND FLOOD

For some people, the spring season is the best season of the year. If you don't have allergic reactions to all the pollen and flowers blooming, this is generally the best season to go out. You can't even deny that once all those plants bloom again as they move out of the cold winter weather, it's definitely "Instagrammable".

If we look a few years back, we saw this type of devastating flood event during the spring season in Nebraska in 2019. What some would call "The Great Flood of 2019" caused about $1.3 billion in damages across the state and took three lives when the Missouri River Basin was overwhelmed with bomb cyclones and caused a lot of flooding across the Midwest. In Iowa, this event even impacted their access to fresh water.

Why did this happen? Well, generally this is because of the rapid snowmelt and when the snow melts, it has to go somewhere. The important thing one should show about spring runoff is that it mostly happens under the condition that natural soil is already oversaturated with water and can no longer take in more. So the excess water goes into low-lying areas causing flooding to communities.

HOW TO PROTECT YOURSELF

One thing we highly recommend is keeping a safe distance from the foundation of your property or your home from the snowpack in your yard. It's easy to forget the fact that it doesn't really take that much precipitation and snow to create about two inches of surface water. Generally, we recommend a safe distance of about 6 inches to 1 foot.

It's important to ensure that you steer clear from snow in general because, during the spring season, we can expect spring thunderstorms and spring precipitation which only worsens runoff during this time. So things like heavy rain, storms, and atmospheric rivers can easily worsen the melting snow and produce more runoff.

In Eden, Utah's case, 3 feet of heavy snow can be easily melted by a couple of inches of rain.

We always say that when things like this happen, it's important to be close to your smartphone, TV, or the news to get your weather forecasts ahead of time in order for you to prepare ahead of time.

You can access the National Water and Climate Center, National Weather Service, or your local news to get recent forecasts on the weather during this season.

FLOOD INSURANCE IN SPRING

The most important thing that can protect you and your property from getting taken down by flood damages and not being able to bounce back from flood loss is flood insurance. However, take this as a precautionary reminder that flood insurance may be hard to find during the spring season starting in the month of March, especially for private flood insurance.

During the spring season, some private flood insurance companies would go on moratoriums which simply means that they won't provide insurance during that period. They will only cater to people who already have an active policy with them, so if you're applying for one, it may really be hard to find.

Getting into private flood insurance as soon as now can really help you resolve the concern of insuring your property because they only have a waiting period of 3 to 15 days.

Although the National Flood Insurance Program (NFIP) and Federal Emergency Management Agency (FEMA) don't really do moratoriums, you still should be aware that you might not get flood insurance from them immediately because of their strict 30-day wait period.

If you are ready to take the next steps to get the right flood insurance coverage then there are three simple steps.

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

Got more flood insurance questions? Visit our Flood Learning Center below to know more:

Flood insurance is what might be one of the most important coverages you can get nowadays. A single flood policy can provide flood protection for thousands of dollars. However, did you know that not only residential homes and commercial buildings can get flood insurance?

In this article, we want to talk about how you could protect your flood insurance premiums as a landlord, or apartment building owner, and make flood insurance easier for you, your property, and your renters.

Flood Insurance for Apartment Building Owners

When it comes to flood insurance as an apartment building owner, you want to make the most out of your investments. Considering how most of your properties will be one of the sources of your income, it's best to help them avoid getting ravaged by flooding. This will not only impact your property but also the potential customers you may have in the future.

So let's talk about the things you can do to make utilize your flood insurance best. We will talk about the following things:

• Blanket Flood Insurance Coverage
• Loss of Use
• Replacement Cost & Elevation of Structure

Blanket Coverage

First, it's important to know the type of flood insurance coverage you need to get for your property. This may be through individual/specific flood coverage or blanket flood coverage.

The difference between these two is that individual coverage is only specific to a single property. So the building and personal property coverage with your flood policy will only be applicable to a single structure. This is not really ideal if you have multiple properties.

On the other hand, you may be able to get a blanket flood insurance policy; which really eliminates most of the limits you will see on an individual flood policy alone.

Blanket insurance means that you may get the same flood insurance coverage for multiple properties with just a single policy. This means that flood coverage for flood damages may apply to more than one type of property at the same location or the same type of property at multiple locations.

It's important to note however that the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) generally don't offer blanket flood insurance coverage however you can still get one through other private flood insurance companies.

Loss of Use Coverage

Now, let's jump into one of the things that you should be looking to include with your flood insurance policy: loss of use coverage.

Loss of use is generally an additional coverage that you can get with flood insurance. The purpose of this coverage is to provide you with actual cash or any form of reimbursement for you as the property owner of a rental property.

When your property gets hit by flood, as the repairs are ongoing, you won't really have use of the property. With this coverage, instead of not being able to earn anything as the repairs are ongoing, the flood insurance policy may provide you with whatever potential income you are losing during that period.

Replacement Cost & Elevation of Structure

Last on our list is the replacement cost value of your property and why protecting it from flood damage can directly impact the profitability of your property as an apartment building owner.

Replacement cost is simply the amount or cost of the property's structure if you were to sell it on the market. For flood insurance, this is generally considered because the replacement cost will be the basis for your flood insurance rates. So if you have a higher or more expensive amount for the building, you may also start to see some form of an increase in your rates.

It's equally important to also consider the elevation of your property because this generally shifts your risk of flooding. An elevation of your property will also help show that you are at a reduced risk for flooding.

This is why despite elevation certificates being no longer required for flood insurance, it still is a helpful document in lowering your risk and sometimes even removing your property from a flood zone.

Protecting Your Premium Rates

When you start processing the purchase of flood insurance, it's best to consider these three things in order to protect your premium rates. This is really important especially if you have a building that sits in a high-risk area where the chance of flooding is not only high but also sometimes unpredictable.

As a property owner of apartment buildings, you may want to make the most out of your flood insurance coverage. For the federal flood insurance side of the market, you may start seeing a max of $500,000 on your building coverage.

Although the private flood insurance market has more flexibility with coverage amounts, meaning you can go further than $500,000 for your building coverage, this won't really guarantee that you can lock in on your premium rates.

One of the biggest risks of a flood-prone property is that you also lose interest and appeal to your potential customers. If people start to see that your property is a high-risk one when it comes to flooding and damages, renters might choose another option. This in turn will hurt the profitability of your property long-term.

If you are ready to take the next steps to get the right flood insurance coverage then there are three simple steps.

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

Got more flood insurance questions? Visit our Flood Learning Center below to know more:

The flood insurance market has been constantly changing for a couple of years. We've seen this happen for federal flood insurance and even for flood insurance availability.

One of the biggest changes came in form of allowing private flood insurance for property owners who have an FHA loan, USDA, or even VA loan. In this article, let's talk about how the private flood insurance market is changing the whole flood industry.

Coverages

When it comes to understanding how the private flood is changing flood insurance coverage, we first need to get a basis or some form of comparison to the National Flood Insurance Program (NFIP).

So, let's just mention here that when it comes to federal flood insurance, you only get a maximum of $250,000 in building coverage and $100,000 in contents coverage or personal property coverage for residential flood policies. This coverage amount can go up to $500,000 if you're doing a commercial flood policy.

Now that we've established this, it's important to highlight that private flood insurance companies don't have these coverage limits. You can definitely still get more than $250,000. Even when it comes to personal items or content coverage, you can definitely go more than $100,000 for flood damage. That coverage also comes with the loss of use, additional living expenses, and/or replacement costs.

Pricing

When it comes to pricing, private flood insurance also offers more flexibility and is generally cheaper. This is especially true if we look at how the National Flood Insurance Program (NFIP) Risk Rating 2.0's impacts which will cause around 77% of the properties to get an increase in premium rates.

To know more about private flood insurance pricing, watch the video below to know more:

Claims Payout and Wait Period

Now, let's jump into what may be the most crucial parts of your flood insurance policy: claims and wait periods.

When it comes to wait periods, private insurers generally have a quicker turnaround time for your policy to take effect on your property. Most private flood insurance policies can be available and take effect on your property within a maximum of 15 days.

This is relatively shorter than federal flood insurance with a strict 30-day period. This can be helpful since you immediately get coverage and flood protection on your property quicker.

This type of faster wait time is also applicable for a claims payout. When filing for a flood insurance claim with private insurers, you may get the payout on your private policy within a maximum of 60 days. Now, it's important to note here that this generally depends on private carriers, so your flood claim may be available at an earlier time.

Payment Options

Payment options with private flood are almost similar to the National Flood Insurance Program (NFIP). So you can pay this out of your pocket or through your mortgage bank. When we say that you pay out of your pocket, this means that you pay for the whole premium via cash or using your own funds.

This is drastically different from mortgage payments since carriers would generally bill your bank for your flood insurance. What is important to note here is that there will be more mortgage payment options moving forward as the private flood is now available even for FHA, USDA, or VA loans.

Additionally, some private flood carriers may offer quarterly payments. This may provide more flexibility in paying your flood premiums, but there will be no delay in your flood protection and coverage. This can really be beneficial for premiums that are relatively high. Although banks may not be able to push through with this, paying $2,000 quarterly is way easier than paying it whole upfront.

It's also important to mention here about payment grace periods which, depending on your carrier, may have a 29-day grace period, 7-day, or even no grace period at all for payments to be made.

Want to know more about the difference between NFIP & Private flood in 2023?
Watch this video below to get started:

CHANGING FLOOD MARKET

So this is how the private flood is adapting to the constant changes in the flood insurance market. It's important to keep in mind that this generally doesn't guarantee that it's the best option for your needs. Sometimes, private flood may not be available because most of its assessment isn't based on flood zones alone.

If you want an in-depth understanding of private flood insurance, make sure click below to access our Private Flood Insurance Course:

We will have to wait and see if federal flood insurance will also follow the path that private flood insurance is taking or one-up it by doing more to fight flood risks and provide more substantial flood protection for residents across the United States.

If you want to start your flood insurance, follow these three simple steps:

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

If you have additional questions that are related to flooding and flood insurance, make sure to visit our Flood Learning Center where we try to answer all your questions. Click below to start your flood learning with us!

When it comes to coverage on flood damage, it's important to know what insurance policy can provide this for you. Sometimes, you may receive a flood coverage rejection letter. Now, you might be wondering what is this document and why is it important.

In this article, we talk about this flood coverage reject letter, your flood insurance coverage, and how knowing this can really help your property be saved from flood loss.

Understanding Insurance Coverages

In order to understand this letter, first we need to go back to the coverage process and terms when it comes to other insurance policy types.

This is the best time to really mention that when it comes to homeowner's insurance policy, you don't really have coverage for flood damage built-in or included with your standard homeowner's insurance. Most of the protection that this insurance will provide will be for water damage, disaster damage like tornadoes, fires, earthquakes, and sometimes even mold damage. However, this does not really cover damages or losses from flooding. 

You also have auto insurance on this topic, but the coverage with this policy is only for your vehicular damages. This can be through natural causes like disasters that we mentioned or accidents.

But one thing that you may get from your insurance agent for both of these policies is the flood coverage rejection letter.

What is Flood Coverage Rejection Letter?

This letter is a document that you are expected to sign to acknowledge that when it comes to your homeowner's or auto insurance policies, you are aware that you won't get coverage for the damages due to flooding from these policies.

The purpose of a flood coverage rejection letter is to really get your confirmation that you are aware that you won't get any flood insurance coverage from these policies.

Sometimes, your agent might send you this letter and if you sign it, you directly reject or decline the flood coverage offered by them. Now, this is important because when a flood loss happens, you may not file for a flood claim since you already signed the rejection letter.

Basically, signing this letter simply means that you agree to not get coverage for flooding.

What If You Didn't Get One?

On the other hand, if you didn't get a flood coverage rejection letter from your insurance carrier for your property or vehicle, then that simply means that they didn't offer any coverage.

Generally, you might need to get a separate flood insurance policy if you want to be covered for flood damages. So, you might be wondering, what are your flood insurance options?

A standard flood insurance policy with the National Flood Insurance Program (NFIP) can provide you coverage for a maximum of $250,000 for building coverage and a maximum of $100,000 for content or personal property coverage for flood losses. This is especially true if you have a policy with the NFIP and even with its recent Risk Rating 2.0 update.

On the other hand, private flood insurance is where you can find more flexibility as their standard flood policy coverage doesn't really have limits. You can generally go way above that $250,000 and $100,000 coverage with federal flood insurance.

To learn more about the NFIP and Private Flood insurance, WATCH the video below:

Get Flood Insurance

Nowadays, flood insurance is a must because flood damage can happen anywhere. As we always say, all properties should have coverage from flooding since floods can happen anywhere even in places that aren't considered high-risk areas for flooding.

Getting the right flood coverage with your home can really help you reduce the impacts of flood risk and bounce back from a natural disaster like this.

So if you have additional questions that are related to flooding and flood insurance, make sure to visit our Flood Learning Center where we try to answer all your questions. Click below to start your flood learning with us!

Let's start simplifying your flood insurance. You only need to follow our three easy steps:

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

One of the biggest things that really impact flood insurance is flood zones. Aside from being a form of measurement of how the property is going to flood, this is also a big consideration when it comes to flood insurance.

In this blog, we want to talk about one of the most common flood zones you'll see in flood insurance rate maps (FIRMs), the flood zone AE and discuss the 4 things you need to know about this zone.

Flood Zones

Flooding is one of the biggest and most common natural disasters that occur in the United States. It's estimated that even just an inch of water can cause around $25,000 in property damage.

One of the key things that can tell your risk of flooding and your property's chance of flooding is its flood zone. Historically, with the National Flood Insurance Program (NFIP), these flood zones are one of the bases for assessing your flood insurance premiums.

However, since we moved into a new Risk Rating 2.0 program, flood zones became more of a regulatory measurement. This simply means that flood zones are only used now to see whether or not you're required to carry a flood policy with your property.

Flood zone AE is one of the common high-risk flood zones in the United States. In order to understand this high-risk zone, we will give you four things that you need to know by answering the following questions:

• Is Flood Zone AE in the 100-Year Floodplain?
• Is flood zone AE in a special flood hazard area (SFHA)?
• Is flood insurance required in Flood Zone AE?
• How does Flood Zone AE impact flood insurance rates?

So, let's answer these questions, but first, let's determine...

What is Flood Zone AE?

Flood zone AE is also known as a special flood hazard area since this is generally a zone where flood risks are very high and flooding can happen once every 100 years. Flood zone AE also has its base flood elevation determined through flood maps. 

This is why it's commonly known as well as the 100-year flood zone. This is strictly based on research on probability however this doesn't really reflect how disasters work so it still differs. The flood zone is also known to have a 1% chance of flooding per year.

Is Flood Zone AE in the 100-Year Floodplain?

Being in the 100-year flood area or floodplain, Flood Zone AE presents around a 26% chance of flooding during a 30-year mortgage. This generally entails the risk for flooding on the property during that period. Generally, you will see properties in flood zone AE are close to a body of water.

Is Flood Zone AE in SFHA?

With the previous item answered, this easily puts Flood Zone AE in the special flood hazard areas (SFHA).

Special Flood Hazard Areas (SFHA) generally are areas that can experience a different type of floods. The Federal Emergency Management Agency (FEMA) would also qualify a flood zone designation as being in the SFHA if it experiences special floods, mudflows, or floods that are due to erosion hazards.

Is Flood Insurance Required?

Due to the flood zone being a high-risk area, properties that are mapped into flood zone AE are generally required to carry flood insurance.

This means that if your home or commercial building is sitting on flood zone AE, your mortgage will require you to get flood coverage for the property against flood damage. This is to make sure that the property's value, structure, and integrity is protected and preserved in the event of a flood disaster.

These zones are determined by the flood insurance rate map (FIRM) to see if the structures of the properties can keep up with the possible flood risk in the area. It's important that the flood map uses the data on the chance of flooding in the area, the base flood elevation of the community or the property, and as mentioned before the probability of a flood in the event that there's heavy rainfall or somewhere along those lines.

So, when it comes to Flood Zone AE, you can expect that a mandatory flood insurance purchase will be expected for property owners who are mapped into this high-risk flood area. This may come either from your mortgage lender or through FEMA itself.

Flood Zone AE & Premium Rates

To answer the question: How does flood zone AE impact flood insurance rates, we will have to look at both the past and the current state of the flood insurance industry.

Traditionally, with the NFIP and FEMA, being in a flood zone AE has a direct impact to flood insurance costs. This is because, historically, federal flood insurance would use flood zones as a basis for flood insurance premiums which means that generally, some properties with minimal flood hazard will see cheaper flood insurance rates compared to flood zone AE.

However, things have changed with NFIP's Risk Rating 2.0 which only uses these zones as a measurement of whether or not a property should have flood insurance. So, flood zones no longer have an impact on rates. The same can be said for the private flood insurance market.

It's important to remember, however, that there are other things that your flood insurance policy costs will be based on such as distance to water, type of flood, frequency of flooding, the elevation of the property, and many more.

So, those are the four things you should know about flood zone AE in the current flood insurance market. If you have questions regarding flood zones, flood insurance, or anything flood-related, click below to access our Flood Learning Center to get your answers.

Ready to start simplifying your flood insurance? Just follow these three simple steps:

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

The flood insurance industry is now changing more than ever. These changes are really to lock down on ensuring that your flood risks are well covered so that you won't get lopsided by a flood event.

Some of the changes we've seen in recent years are how the National Flood Insurance Program (NFIP) updated to Risk Rating 2.0 and another would be the availability of private flood insurance for FHA loans.

In this blog, we will talk about parametric insurance for flood policies and how it could impact the flood industry as a whole.

What is Parametric Flood Insurance

Parametric insurance in general is a form of coverage wherein the policyholder will be rated on the overall impact or severity upon an occurrence of the event. This is drastically different from simply basing it on the impacts or losses to the insured.

In the case of a natural disaster like earthquakes, wildfires, or floods, this means that the coverage that will be provided will be based on the actual impact of that disaster on your property.

For flood insurance, this could mean that you will be covered based on the general impact of the flooding instead of simply how much flood damage your property occurred. Generally, parametric flood insurance also kicks in as the flood event is hitting you instead of having the insurance coverage kicking in after assessing the damage to the insured building.

This real-time analysis is done by using technologies from satellites and other data that detect things like the level of water impacting the installed device on the property. This allows the insurance companies to also provide the necessary claims as soon as possible since the assessment is being done during the flood event and not simply after.

To set an example, FloodFlash — led by Mark Hara — one of the leading parametric flood insurance that's recently adding the United States to the areas where they are looking to provide coverage, mentioned that they use a specific tool that immediately notifies them whenever a policyholder gets flooded.

So, you might be wondering, how is this different from the standard flood insurance policy that you can get through the NFIP or private flood insurance?

Difference Between Parametric and Standard Flood Insurance

When it comes to what sets parametric flood insurance from standard flood insurance policies, we will look into its coverage, claims payout, and overall timeframe for your policy to kick in. So, let's discuss each of these.

Coverage

A standard flood insurance policy can provide you coverage for a maximum of $250,000 for building coverage and a maximum of $100,000 for content or personal property coverage for flood losses. This is especially true if you have a policy with the NFIP and even with its recent Risk Rating 2.0 update.

On the other hand, private flood insurance is where you can find more flexibility as their standard flood policy coverage doesn't really have limits. You can generally go way above that $250,000 and $100,000 coverage with federal flood insurance. 

So, how is parametric flood insurance different?

Well, since your flood insurance claim will be paid out through cash or generally directly to your bank, you can get more than what a standard flood policy offers. This means that even additional living expenses or business loss of use will be part of that coverage.

These coverages are something that traditional insurance doesn't generally include especially for federal flood insurance. Hence, parametric flood insurance can really fill in for that coverage gap that standard flood coverage generally misses. This is no surprise as it is, after all, one of the goals of parametric insurance.

It's important to note, however, that parametric insurance policies are based on a pre-agreed sum of money when it comes to coverage. This means that if you agreed to get only $250,000 for coverage with your parametric flood insurance policy, that is the only amount you will be getting.

Claims Payout & Turnaround Time

Now, when it comes to claims payout, parametric flood insurance also has its fair share of beneficial factors because of how the system works.

You see, once your insurer detects that the water levels hit that certain spot — generally about 8 inches of water — the insurers' system immediately gets notified about this as if it's saying "Hey! This property is legit getting flooded right now".

Generally, this means faster turnaround time and assessment. Since parametric flood insurance basically has the amount of coverage ready to fight against flood damage and the data confirms the flooding, flood claims may be paid out as soon as 24-48 hours.

Again, since most companies who provide parametric flood insurance tend to provide coverage through cash, this means that you get the payout immediately or the coverage is generally transferred to your bank.

RELATED: 3 Things that Must Happen for Flood Claim to Pay Out

On the other hand, a standard flood policy will generally pay out in less than 90 days. This is because there's a process such as assessing the damage, filing the flood insurance claim, and waiting for the claims payout.

Although this timeframe generally depends on your insurance provider, it can still take days (if not weeks) for a flood policy to pay out with traditional flood insurance.

Why Parametric Flood Insurance is Good

Now that we've covered what parametric flood insurance can do, it's easy to see why this could really help homeowners and business owners in the United States.

Since it fills in the potential gaps in standard flood insurance and has a relatively quick turnaround time for payouts, this can really improve our resilience to the risk of flooding.

Considering how the impacts of climate change and the behavior of water are drastically changing for the worse especially in recent years, having this type of insurance protection will really help more people find security and certainty.

Moreover, adding this option in the flood insurance sector may also increase property owners' motivation to get flood insurance for their property.

Got more questions on flood insurance or parametric flood policies? Is there a flood question that you need answered? Click below to go to our Flood Learning Center where we try to answer all your flood-related questions.

Ready to start simplifying your flood insurance? Just follow these three simple steps:

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