Chris Greene

Chris Greene
President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation

Recent Posts

We are veering close to more instances of flooding. This is especially noticeable as cresting rivers increase flood risk, especially in the upcoming months.

This is just one of the scary things to come with flooding. In this article, we want to talk about the number of flood insurance policies in one of the high-risk areas in the United States, Mississippi, and determine the reasons why the state is lacking flood policies for residents.

Why Residents in Mississippi Aren't Purchasing Flood Insurance?

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As the Pearl River is expected to crest anytime soon, which means that only 3% of Mississippi properties will have protection against flood damage in any potential flood event. To put this in another way, only 75,000 flood policies are active as of last month and this is both covering flood policies from the National Flood Insurance Program (NFIP) and private insurance companies.

So, why is this happening? 

Why Are Flood Policies so Low?

Not in a Flood Zone

The first reason we always hear that comes from not just property owners, but also mortgage lenders and insurance agents. This is a common misconception in the flood insurance industry which we've covered in our previous blog.

When a mortgage company tells you that you're not in a flood zone, this doesn't really mean that you won't get flooded instead it simply means that your property is no longer in a high-risk flood area or high-risk flood zone like a flood zone A.

Why Residents in Mississippi Aren't Purchasing Flood Insurance?

A lot of people think that they're not in a flood zone, so they don't need flood insurance however this isn't really the case. When your mortgage company or insurance agent tells you that you're not in a flood zone and hence you don't need flood insurance, this doesn't mean that you're not going to be flooded.

 

 

 

 

Get A QuoteIt's important to note that when you're not required to carry flood insurance is due to the fact that maybe your house sits on or was moved into a low-risk area. Now, when it comes to the time that a flood event happens, these low-risk flood zones have less likelihood to get properties inundated with water. However, low-risk zones don't mean zero risk so you can still get flooded even if you're mapped into low-risk flood zones in Mississippi.

Why Residents in Mississippi Aren't Purchasing Flood Insurance?

This is why a flood map or flood insurance rate map would show you in a flood zone regardless. These requirements of when to get flood insurance based purely on flood zones are creating a bigger disaster than the water itself.

This isn't an exception from the damages, however. This brings us to the second reason...

Flood Risks

A lot of low-risk areas get inundated with water even after a storm or heavy rainfalls in other zones because there's a chance that the excess flood water will flow into these low-lying communities. You also have to consider that certain development disrupts the natural pathways of water and causes only 10% of the water to go into the ground.

This second reason will be coming from people who know that they're in a low-risk flood zone, but underestimates the damages that flooding can bring to their doors. It's important to note that these flood zones determine how much flood your property might get. This doesn't indicate how severe the impact may be as flood damage varies depending on the circumstances.

Why Residents in Mississippi Aren't Purchasing Flood Insurance?

A rapid flash flood can cause more damage than standing water that's inundated your home. This also means that it's very much possible to have the same flood impact regardless if you're in low-risk or high-risk areas.

Homeowner's Insurance Policy

Lastly, we have another common misconception when it comes to insurance, flood insurance coverage, and more. A lot of people think that flood coverage can be attached to your homeowner's insurance once you secure a policy for the structures in your home.

You might think that it's something you can get as additional coverage from your homeowner's policy. This misconception might be one of the biggest reasons for most people to assume that they wouldn't need to get that flood insurance policy since it will be under their homeowner's insurance.

Why Residents in Mississippi Aren't Purchasing Flood Insurance?

It's important to understand that your homeowner's policy doesn't really cover any damages from flooding. Flood insurance is a separate entity when it comes to insurance coverage. This is because the National Flood Insurance Program (NFIP) and even private flood insurance companies follow the "Rule of Number 2". This means that water will only be considered a "flood" if two or more acres of land or properties are impacted by water.

It's important to emphasize that homeowner's insurance policies won't be able to cover any losses caused by flooding. Only flood insurance can do that. If you want to know more about flood insurance coverage, watch our video below to know more:

Pricing of Flood Insurance

Lastly, residents might be hesitant to get flood insurance because of its pricing which is generally increasing especially for the National Flood Insurance Program (NFIP) option due to Risk Rating 2.0.

It's important to remember that the NFIP Risk Rating 2.0 is mostly causing an increase in flood insurance rates and premiums. This is expected to impact 77% of properties purchasing or going through the NFIP. This is in lieu of a more accurate representation of your flood risks. E&E News reported that the NFIP policies in areas with moderate flood risk across the United States dropped by 34% during June this current year.

Why Residents in Mississippi Aren't Purchasing Flood Insurance?

For reference, here's the Federal Emergency Management Agency (FEMA) report on the expected changes to premium rates across the country.

But Risk Rating 2.0 isn't the only reason why flood insurance is getting more expensive. We can see the same trend due to increased replacement costthe cost of rebuilding the property and hence its market value — getting more expensive as well. So the premium rate increase can also be felt on both federal and private flood insurance sides.

Although expenses are becoming more expensive and the budget getting tighter due to our economic situation, it's still dangerous to not get flood insurance. You might be thinking that you're saving a lot by not getting a  flood policy. However, if you don't have flood insurance coverage for your property, you're not going to get any option to file a flood insurance claim for the flood loss which can cause hundreds of thousands.

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Flood Insurance in Mississippi

Although these reasons might be enough for you to not get flood insurance, as we mentioned, you might be risking more financially than saving. At the end of the day, getting flood insurance is really the only option you have to fight against flood damage. As we move towards the hurricane season for 2022, it's best to be prepared against flooding. 

Find My Flood Risk & Flood Rate

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

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

 

Watkinsville Georgia and Oconee county GA are getting new flood maps in September 2022.

In this flood map video update, we look at the following

  • When is it happening
  • The good, bad, and the ugly changes
  • Can you fight these changes
  • What are the flood insurance options available?

Exactly 5 years ago, a category 4 hurricane finally dissipated however it still left a lot of flood damage in its wake especially over in the Houston, Texas area. The damage from this flooding alone was around $125 billion.

In this article, we look at how Hurricane Harvey could impact flood insurance policies, especially with the private flood insurance market for homes across Houston, and what it could mean in the future.

Hurricane Harvey 5 Years Later: Impacts on Flood Insurance

Hurricane Harvey: 5 Years Later

Hurricane Harvey was one of the most devastating disasters we've seen in recent times. This was the hurricane that submerged 25-30 percent of Harris County just for example. Other than the flooding that happened, it's important to note that this type of natural disaster has implications for the future of your flood insurance.

Let's compare what this could mean for both federal flood insurance and private flood insurance for those impacted by Hurricane Harvey.

Federal Flood Insurance

One of the more known flood insurance options is the National Flood Insurance Program (NFIP) under the management of the Federal Emergency Management Agency (FEMA). Although they don't really pick and choose who to provide flood insurance for, they will have considerations on the impacts of Hurricane Harvey on your property.

For example, now that the National Flood Insurance Program (NFIP) moved into the Risk Rating 2.0 program, if you made a claim due to the damages you got from Harvey, it will be forgiven. However, if you recently made a flood insurance claim then the NFIP will most likely do a 20-year look back and assess your claim variable.

Hurricane Harvey 5 Years Later: Impacts on Flood Insurance

This simply means that they will look into the last 20 years of the property's flood claims. Now, if you did more than 1 claim this could mean that your flood insurance rates will increase with the NFIP. This is something we should expect especially due to the fact that the Houston area has been getting floods recently.

Other than the increase in flood insurance premiums, generally, you still have an option to go through the NFIP without any problem. However, the same thing can't be said for private flood insurance.

Private Flood Insurance

It's a different story when it comes to the private flood insurance market, however. It's important to note that these insurance companies have the option to pick and choose who they provide flood policies.

This means that if the only flood insurance claim made in the past 5 years was due to Hurricane Harvey, then you wouldn't really have much trouble getting flood insurance policies from the private market. However, this can be a bit difficult as areas like Houston have been getting flooded more recently.

Hurricane Harvey 5 Years Later: Impacts on Flood Insurance

This system is mostly reliant on the private market's 5-year look back when it comes to flood claims. Private flood insurance companies would most likely choose properties that haven't flooded in the last five years or haven't made a flood claim in the last 5 years. This can be a challenge when finding flood insurance options, especially in some areas of Texas like Houston.

Flood Insurance Options

Does this mean that you won't be able to go through these flood insurance options then?

Not really. It's important to note that if you don't have existing flood insurance, it's best to secure one through either of these options (federal or private flood insurance).

Hurricane Harvey 5 Years Later: Impacts on Flood Insurance

The National Flood Insurance Program (NFIP) would still be able to offer a flood policy for your home regardless of the claims made with it. It's important to keep in mind that your flood insurance rates may increase due to claims and other factors which are considered under the Risk Rating 2.0 program.

NFIP flood coverage stays the same however with $250,000 for building coverage and $100,000 for content coverage for residential policies and only up to $500,000 in building coverage if you have a commercial policy.

Your flood risk will be calculated based on: foundation type, types of flooding and flood frequency that the property experiences, claims history or claims variable, the elevation of the property, and distance to water to name a few.

Hurricane Harvey 5 Years Later: Impacts on Flood Insurance

On the other hand, you may still see a private flood insurance option available especially in the Houston area however you might want to consider the type of loan you have as only selected loan types can go through the private flood.

Private flood has a more flexible system of flood insurance coverage which makes it so that your policy will have somewhat manageable rates. This means that the coverage limits that the NFIP has won't exist with private insurance companies.

At the end of the day, getting flood insurance is really the only option you have to fight against flood damage. As we move towards the hurricane season for 2022, it's best to be prepared against flooding. 

Find My Flood Risk & Flood Rate

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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Flood insurance rates can hurt the wallet. Wouldn't be nice if your wallet was impacted less? The NFIP is trying to modernize the program to do that.

In this blog we will discuss this problem, the solution that is being offered, and how to put time and money back into your life by simplifying these changes

Modernizing The National Flood Insurance Program (NFIP)

However, even with this update — which was made live for all policyholders on April 4, 2022 —, a new legislative proposal is still at hand. Let's talk about the seventeen (17) proposal reauthorization with the Federal Emergency Management Agency (FEMA) and how it can impact flood insurance.

The NFIP Reform

Congressional leaders outlined in their Legislative Package Reform some of the principles they are planning for the National Flood Insurance Program (NFIP)'s priorities in the long run.

It's important to note that despite the changes with Risk Rating 2.0, there are still a lot of concerns that flooded residents outside of flooding alone. One of the biggest concerns is flood insurance premiums being too high for most policyholders.

Modernizing The National Flood Insurance Program (NFIP)

Hence, the NFIP proposal for reform is intended to include the following things which boil down to the following:

  • Affordability of flood insurance for low-and-moderate income families
  • Risk communication and flood risk mitigation
  • Reducing flood risks and addressing repetitive loss properties
  • A sound and transparent financial framework

So what do these four entail? Well, look no further as we'll discuss it here.

Financial Framework

First, we need to address the biggest concerns that residents have with federal flood insurance: flood insurance rates.

It's no secret that there are bound to be some increases on your premium rates once that RIsk Rating 2.0 kicks in. We can owe this to the fact that your full flood risk is being taken into account when it comes to your policy.

1. Making NFIP Sustainable

One of the biggest concerns with the Federal Emergency Management Agency (FEMA) and the NFIP is that it's still reeling from the debt it has which increases per year.

The proposal looks to clarify the National Flood Insurance Act of 1968 (NFIA) to support full-risk rates. This way, a sounder financial framework is being established for policyholders.

Modernizing The National Flood Insurance Program (NFIP)

A full-risk premium rate with flood insurance is the rate that's being charged to a group of policies. Generally, this causes the premium rate of flood policies to be calculated as a group to make it more sufficient to pay any anticipated losses and expenses.

This means that if you're doing a policy that covers multiple buildings, you might find it easier to manage your premium rates as this will follow a full-risk rating method.

Modernizing The National Flood Insurance Program (NFIP)

2. Borrowing Authority

Another thing coming up with this proposal is aiming to eliminate interest for future debt and decrease how much the NFIP can borrow. This means that the National Flood Insurance Program (NFIP) is only allowed two-thirds of total premiums in force.

It's important to note that this has a direct impact on the availability and affordability of flood insurance with the NFIP.

Modernizing The National Flood Insurance Program (NFIP)

3. Financial Resilience

The NFIP proposal also looks to provide some form of resiliency and reliability with the federal flood insurance option.

This comes in the form of allowing liquidity in order for you to be able to quickly get your flood insurance claim paid. This also looks to provide that without any problems in the future.

Modernizing The National Flood Insurance Program (NFIP)

Communicating and Analysing Risks

Another thing — what might be the most important one — that the proposal is looking to reform is how residents get information on their property's flood risk.

Here are the new provisions that this NFIP reform is looking to propose.

4. Risk-Informed NFIP

There are two things that this item covers: flood maps and information on flood risk.

FEMA is looking to simplify and provide clarity on how flood insurance rate maps really impact federal flood insurance. So, instead of simply saying that your house is in a flood zone, this reform aims to provide an understanding of where flood insurance is required.

Modernizing The National Flood Insurance Program (NFIP)

This is really important considering how Risk Rating 2.0 is moving flood zones as a regulatory basis for flood insurance and not premium rates.

Now, when it comes to risk information, the proposal aims to enhance flood insurance products that help understand what flood risks really are and, rates-wise, how they impact flood insurance quotes and policies.

5. Flood Risk Disclosure

Another concern that this NFIP reform is looking to change is how flood risk is being shared with property owners.

Generally, the property's flood risk is either made known to the buyer after the real estate transaction or during the sale. This also applies to renters and not just property owners. Hence, the proposal looks to require full disclosure for participating communities on what risks the houses are facing when it comes to flood risk.

Modernizing The National Flood Insurance Program (NFIP)

For floodplain management of participating NFIP communities, this means that there must be at least a minimum flood-risk report sent to the seller and lessors before they even close the deal.

Simply, this means that you will get to see firsthand the flood risk you are facing.

6. Replacement Cost Value & Premium Rates

For this one, the proposal is more concerned with how premium rates are being calculated. This reform looks to use the replacement cost value (RCV) or the value of the property in determining the flood insurance rates.

Generally, this looks to help you get a sign and understand the true risk for flooding that your property is facing. This proposal somewhat echoes what Risk Rating 2.0 aims to do which is to accurately provide flood risk.

7. Coastal Zones and Inland Areas

Another thing that we're seeing with this proposal is how coastal zones and areas are being separated from inland locations.

We have seen how flood zones are being overhauled to also address the flood risks for coastal areas such as the Coastal AE zones. This is being done in order to get a better understanding and rating for the two different areas.

Improving Resilience

8. Multi-Year Reauthorization

One thing that most people might not know about the National Flood Insurance Program (NFIP) is that its original authorization expired in September of 2017. You might be wondering by now, how were they able to provide flood insurance in the past few years?

This is because the NFIP is clinging to short-term extensions. However, the proposal is looking to extend the reauthorization up to September 30th, 2031.

Getting authorization means that FEMA and the NFIP will be able to provide flood insurance for residents across the country until the next 9 years. This also means that they get to sell and service flood policies even during a lapse of appropriations.

Modernizing The National Flood Insurance Program (NFIP)

9. Means-Tested Assistance

Now, this is one of the biggest things coming out of this NFIP reform program is how low-to-moderate incomes are being considered when rating properties.

What does this mean? Flood insurance policies will be easier to manage because of the graduated discount benefit for both current and potential residential properties that will purchase flood insurance from these areas.

Modernizing The National Flood Insurance Program (NFIP)

You might be wondering what's being considered low-to-income households. According to the proposal, these households are those that fall at or below 120% of the Area Median Income.

At the time of writing, the initial estimate of median household income is around $76,000 in a report from April 2022. Now, it's important to note that this consideration depends on where you are.

10. Excessive Loss Properties

A new form of loss properties is being added with this proposal termed "Excessive Loss Properties" or simply XLP. A property is going to be listed as XLP if four or more flood claims and their respective payments of at least $10,000 were made in the life of the property.

Due to this indication of constant flood loss on the property, FEMA will have the discretion to not provide flood insurance. This means that if your house is listed as XLP — due to more than 4 instances of incurring flood damage — you won't be able to go through federal flood insurance for your policy.

Modernizing The National Flood Insurance Program (NFIP)

It's important to note that an update to repetitive loss (RL) and severe repetitive loss (SRL) definitions are also in place with the existence of the XLP. A property will be considered a repetitive loss (RL) if it incurred two or more separate claims payments of any amount that goes beyond the loss-deductible in your flood policy.

On the other hand, a property will be listed as severe repetitive loss (SRL) if it incurred flood damage and receive a claim payment for four times or more. The claim must be $5,000 with a total amount of $20,000.

How To Get Out of Repetitive Loss

It's important to note that it's not the end of the road if you were to get listed as an RL, SRL, or XPL, you can still have your property removed from that list and avoid increased rates and/or unavailability of NFIP insurance.

The only way to do this is to have your property follow and comply with flood mitigation standards set by your state's floodplain ordinances.

Modernizing The National Flood Insurance Program (NFIP)

11. Compliance & Mitigation Coverage

Another good thing coming from this proposal is that following and complying with flood mitigation standards will allow policyholders to get higher coverage limits.

It's important to note that the NFIP still follows the $250,000 limit for residential policies and the $500,000 limit for commercial policies when it comes to building coverage. This also includes the $100,000 content coverage limit.

This is being proposed to change depending on how much mitigation you have on your insured property. Simply, the more mitigation you have against flood, the higher coverage limits will be offered for your flood insurance.

Modernizing The National Flood Insurance Program (NFIP)

12. Effectiveness of Mandatory Flood Insurance

Flood insurance with the NFIP would automatically be required for properties that are in the high-risk zone. It has been this way from the Legacy Program up to the current Risk Rating 2.0.

However, the proposal looks to study if the NFIP's requirement when it comes to mandatory flood insurance meets Congress' goal to increase the number of residents, both renters and property owners, covered by flood insurance in low-income areas.

Modernizing The National Flood Insurance Program (NFIP)

13. New Construction Properties

An important proposal that the NFIP reform includes is that there might not be a federal flood insurance option for properties that are new construction or under construction in high-risk areas like Flood Zone AE. This proposal is also applicable to commercial properties.

This aims to promote the private flood insurance market which is constantly growing. The NFIP will be looking to increase the competition for flood insurance companies on the private side to provide coverage for these highest-risk areas and commercial properties.

Modernizing The National Flood Insurance Program (NFIP)

14. Increasing Coverage Limits

Considering the increased housing prices in the country, the endorsement is also looking to increase the limits on flood insurance coverage provided by the NFIP.

This means that we might not be seeing a $250,000 and $100,000 limit in building and content coverage respectively. The proposal mentions that this is due to property owners being underinsured in the event of a total loss. We will have to wait and see what this coverage increase will offer for NFIP policyholders.

 

Technical and Operational

Lastly, there are some technical and operational changes coming from this proposal as well. This involves filing a suit, reporting complexities, and removing barriers to switching to private flood.

15. Period to File Suit

Now, it's possible that there might be an instance where your flood claim with the NFIP will not go through. Although this is the worst-case scenario, it's still good to know the clarifications being made when you file a suit.

The proposal states that you must exhaust the administrative appeals process before starting a lawsuit. This also means that you only have no later than 90 days from the appeal decision date to file a suit if any.

Modernizing The National Flood Insurance Program (NFIP)

16. Reducing Reporting Complexities

The NFIP is also expected to get a reduced number of reports to file for congress. The proposal is looking to change the 15 reports in a span of two years will be brought down into 4 reports only while making sure that the information being provided is still timely and sufficient.

Modernizing The National Flood Insurance Program (NFIP)

17. Removing Barriers for Private Flood Insurance

Although this proposal is offering the thirteenth item in somewhat favor of private flood, they are also balancing this with this removal of barrier when switching to private flood.

What does this mean? The proposal says that policyholders who have a lapse of NFIP coverage, generally due to switching to private flood, won't have the premium discounts they have with the NFIP.

This means that if you ever switch to private flood and eventually switch back to the NFIP, you might be seeing a very different increase because they won't allow you to retain the discounts on premium rates you once had.

Modernizing The National Flood Insurance Program (NFIP)

As we mentioned, there are a lot of changes coming to federal flood insurance, but will these proposals be better for policyholders and give you a competitive option with FEMA and the NFIP? For now, only time can tell.

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.

 

 

2020 has been a year that no one will ever forget. There are three things we want to look at in 2020 and how they could impact the future of coastal private flood insurance.

  1. Covid
  2. Social Injustice
  3. Hurricanes

 

                                                           Covid

When Covid hit in March of 2020 it caused many businesses to come to a crashing halt.

The hospitality industry has basically been non existent and you couldn't pay someone to get on a cruise ship. Airlines are barely surviving. As this happened businesses turned to their insurance companies for coverage.

However many were surprised to find out that most insurance policies don 't cover this type of disaster. Government put pressure on insurance companies to provide coverage. However its difficult to provide insurance coverage when a premium was not charged for a risk.

As these businesses started to close they started to cancel their policies. This started to impact insurance companies as businesses were no longer needing insurance for a closed business. While this was a minimum impact on the bottom line when you add the next two things it creates a major problem.

 

                                 Social Injustice

2020 has seen the rise of social injustice and unrest across many parts of the country. Portland Oregon has seen many businesses burned and even Atlanta Georgia saw businesses damaged after a man was killed in an altercation with police. 2020 was problem the first time in 50 years that you have seen moratoriums put in place by insurance companies for selling business insurance.

At one point Target had to close its Minnesota stores because of looting.

 

                                                Hurricane Season

Now onto the third maybe the biggest thing to impact insurance companies in 2020. The 2020 hurricane season was predicted to be busy but no one predicted it to be this busy. In fact NOAA has had to make several adjustments to their hurricane predictions for 2020.

As we write this blog at the end of October in 2020 we have had 27 named storms, 11 hurricanes have made landfall in the U.S. and 5 hurricanes have made landfall in Louisiana.

This ties the record for most landfalls in a year within one state. Florida set the same record in 2005.

Hurricane Sally, Marco, and Delta have all created major damage in the gulf states. In fact Delta and Sally made landfall only 15 miles a part.

Like most people in 2020 insurance companies are eating through their reserves fairly quickly and they are discovering that many of their risk models were off.

So what does this mean for coastal states like Florida, Alabama, Mississippi, Louisiana, and Texas.

In Mississippi we are already seeing some private carriers halt business completely and we have seen this in Louisiana for a few years. Texas has also had this issue since Harvey.

We could see this pattern start to work its way towards Florida and Alabama.

Does this mean flood insurance will not be available?

No

The National Flood Insurance Program is available for properties where communities participate. It just means that the private flood insurance options could be limited for a while.

This will be a crucial time for you to work with an insurance agency that can defend your risk?

What does this mean?

This means being able to show how a risk may have changed because of mitigation efforts even if it has flooded. We see customers rejected everyday because someone did not defend their property correctly.

If you have questions about what your flood insurance are in these areas then click here. You can also check out our

where we do daily flood education videos. You can also check out our

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

 

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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.

Flood Insurance Guru | Service | Knowledge Base

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 & 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 & Flood Rate