The Flood Insurance Guru Blog
So you found out that you need flood insurance and that you also need an elevation certificate. So you start your search for some one to complete it. Generally this will be done by a surveyor. However before you have it completed you want to ask a few questions.
Here are 5 questions you should ask before hiring a surveyor.
1. Are you licensed
2. How long have you been doing this?
3. How long will it take to get certificate
4. What happens if some of the information is wrong
5. Will you provide color photos
So lets talk a little bit about why these questions. First of surveyors are generally licensed by a state board. This board makes sure that they follow certain ethics and guidelines. The next thing is how long have they been doing this? You want to make sure you are working with someone who has a lot of experience doing elevation certificates as they can be confusing and FEMA can be demanding.
Once they do the work how long will the certificate take? Whether you are waiting on the certificate to get insurance or get a flood zone change you need to know how long it will take. If it is going to take up to 7 days it may have an impact on your home closing if you are purchasing a property.
So you get the elevation certificate back but something is wrong. Your house is a slab but says basement or it says you have an attached garage and you don't. You want to make sure the surveyor is willing to make quick changes if some of the information is wrong. If they are not it could have a huge impact on your flood insurance rates or FEMA may not accept it at all.
The last question you may want to ask is if color photos will be included. If they are not it won't be a deal breaker. You just may have to take them on your own. The reason is if you are doing a new policy through FEMA they will require a color photo of each side of the house. This helps them verify the foundation time, lowest adjacent grade and other things. It also important to know photos must be taken within 90 days of new policy being set up.
As you can see there are a lot of things that go into a surveyor doing an elevation certificate. You want to do your homework to make sure they are done correctly as many are not. So If you have questions about surveyors or elevation certificates please visit our website Flood Insurance Guru. You can also visit our YouTube channel or Facebook page The Flood Insurance Guru where we do daily flood education videos.
So you get a call from the bank about the home you are trying to buy or already own. They state its in a high risk flood zone and they are requiring flood insurance for the loan amount. So you start searching for flood insurance to cover the loan amount. This is where 3 dangers of covering the loan amount can be created which are cost to rebuild, personal property, and additional living expenses.
Let's discuss those three dangers of getting flood insurance for the mortgage loan amount. Let's say you own have a loan amount of $75,000 on a 2500 square foot house more than likely $75,000 is not going to rebuild it. While it is great that the loan amount would be covered if it was a total loss, but most flood losses are not total losses.
So how would you come up with the difference to repair your home. Well if you are in a presidentially declared area you might get a little disaster assistance or be able to apply for an SBA loan . What happens if you get declined?
Well you could be on the hook for the difference which could be more than a $100,000 hit to your wallet. This is why it is so important to insure your home for whatever the replacement cost is but many flood companies don't calculate this so what do you do? Well it is recommended that the flood insurance matches what the home insurance policy states.
The next danger that only covering the loan amount for flood insurance does is it exposes your personal property. Remember if your home floods your home insurance generally will not cover your belongings. If you are only covering the loan amount you could lose everything you own. So how much personal property coverage do you need? Well we generally recommend fifty percent of what ever the house is being covered for.
So the last danger is like pouring gasoline on the fire. So you only covered the loan amount and now you have lost all your belongings, so where are you going to stay. Well if you don't have temporary living expenses listed you might be in a shelter if you are lucky. This would pay for a place for you to stay while your property is being repaired.
As we have shown you only covering the loan amount for flood insurance can be a very dangerous situation. So if you have questions about how to add these other coverages or which coverages to pick please visit our website Flood Insurance Guru. You can also visit our YouTube channel or Facebook page where we do daily flood educational videos.
Today we are discussing the availability of flood loss history on a property. How will the release of this information be beneficial? How will it impact realtors, sellers, buyers, and banks?
For many years the public has been pushing for FEMA to make flood loss history on a property available. However FEMA has always made this information private and only available to the current property owner. As of June 2019 this information now available, so what does the release of this information mean?
Well lets talk about how it can help benefit possible home buyers first. Historically when it comes to buyer beware states like Alabama property owners did not have to disclose the flood loss history since FEMA did not make it available. As you can imagine many people are shocked to find out that their property has flooded before. Many property owners may not have purchased a property had they known it has flooded before. So the June 2019 flood insurance loss release can really help these potential property owners make the best buying decision with the correct information.
Now lets talk about how it could hurt sellers a little bit. As you can imagine if a house has flooded it can scare off a lot of buyers. It can also have a big impact on getting the most for your home when selling. One reason is if it has flooded multiple times a property could be on the severity loss history list. This can make flood insurance very expensive and very difficult to sell a house in the future.
As a realtor having this information can be very valuable because now you can be prepared if you are going to list a house and if you are a buyers agent you can help protect your clients better. Some areas where this is going to have a huge impact are areas like Muscle Shoals, Centre, Owens Cross Roads, and Hokes Bluff Alabama. Knoxville Tennessee, Houston Texas, and areas of New Jersey will also see big impacts. All these areas have seen historic flooding in the past. So this release of flood insurance loss history will protect the buying party.
What will be interesting is how banks treat the release of this information. Certain loan types like FHA have strict appraisal guidelines. So could the release of this information lower appraisal values? Yes it absolutely could if appraisers are able to use verified flood damage in determining values of homes.
Lets be clear the release of this information is a good thing. While it may have a negative impact on some parties like sellers, it gives the public the information they need to make the best decision. So how do you get this information in your hands.? Well it is available at OpenFEMA if you have questions about flood loss history on a property or you want to see how it could impact your flood insurance rates then visit our website Flood Insurance Guru. You can also subscribe to our YouTube Channel or like our Facebook page where we do daily educational videos.
Today we are discussing how the recent FDIC flood insurance ruling will impact the government loan process and people who have a government loan.
First we need to discuss what kind of loan is considered a government loan. These loan types are going to generally be FHA, VA, and USDA loans.
Up until July 1st 2019 the only flood insurance option for people with government loan has been the National Flood Insurance Program. It has been a long term battle getting banks to accept private flood because it follows different guidelines from the National Flood Insurance Program. One reason is the National Flood Insurance Program is regulated by the government are rates are the same. However as NFIP has been hit one disaster after another these rates have skyrocketed. Some property owners have seen rates go from $3500 to $15,000 over a course of 10 years.
As you can see the need for a much more affordable option flood insurance has been needed for a while. However there have been a few concerns the ability for claims to be paid out, finding a long term stable option, and getting private carriers to follow the same guidelines.
One of the struggles of affordability have been how each company determines rates and risk. We can all agree that NFIP has needed to update its mapping accuracy for a long time. However as private companies have come along they have started to use different technologies that are helping them more accurately determine risks.
So as the deadline approaches how is this going to impact the government loan process? Well NFIP has a payment guideline of 30 days if a mortgage company is making a payment at closing. However many private carriers require a property owner to make the first payment up front. This could cause some buyers to come up with more money before closing eliminating some of the 0% downpayment loans.
Something else that could have a huge impact is how flood insurance impacts a persons debt to income ratios. This is how many banks determine if someone will qualify for a loan. So lets say you have a $2000 NFIP quote and a $600 private quote that could be more than a $100 a month on a mortgage payment. So this could help more buyers get into a house they want or get more house for the money.
When it comes to coverages we are talking about two different worlds. NFIP maxes out at $250,000 on building while private flood insurance does not. Private flood insurance provides temporary living expenses while NFIP does not. Lastly private offers replacement cost on contents while NFIP doesn't.
So lets recap a little bit about what impacts the FDIC ruling on flood insurance will have. It will give a much more affordable flood insurance option in many situations, a policy that offers more coverage, and could require buyers to pay up front for flood insurance policies.
So maybe you have a government loan and want to know how this will impact you? You can visit our website Flood Insurance Guru. You can also visit our YouTube channel or Facebook page where we do daily flood education videos.
The Nebraska flooding that occurred in early 2019 caused widespread damage across the state. Homeowners, property owners, and farm owners lost everything. So now that the flood waters are gone what is taking disaster recovery so long? One thing that slows down the disaster recovery for an area is flood insurance.
Disaster recovery is a long road as areas like Nebraska and Iowa have shown us. What makes disaster recovery even longer is disaster assistance and flood insurance. FEMA has stated that disaster assistance is not intended to make you whole again after a disaster, but to have some things covered to get you back on your feet. After Hurricane Harvey in Houston FEMA stated that it paid out an average of $4000 on disaster assistance compared to $110,000 on flood insurance. So as you can see the lack of flood insurance can really slow down a disaster recovery.
So how is this impacting the Nebraska flooding disaster recovery? Well according to FEMA less than 1% of property owners who had flood damage in Nebraska had flood insurance. As a result 99% of property owners who had damage are depending on disaster assistance. So why did so few property owners have flood insurance? Well unlike coastal areas like Galveston and Houston Texas who have to deal with the threat of flooding often due to hurricanes, areas like Nebraska do not. According to FEMA Nebraska experiences a major flood every 5 to 10 years. As a result many property owners do not see the exposure serious since it is a passive hazard and does not happen often.
One reason these people do not carry flood insurance because they have been told they are in a low risk flood zone and can get it. This is completely false flood insurance actually has better insurance rates in low risk zones.
Another reason is they have been told there is only one flood insurance option and its not affordable. This also is not true you have access to the National Flood Insurance Program and private flood insurance.
The third reason why so many property owners did not have flood insurance is they were told that flood insurance is not affordable. The average flood insurance policy cost around $750 a year which covers up to $250,000 on the building and $100,000 on contents in most situations. So let's say you pay this premium for 10 years which is a premium of $7500 and you have a deductible of $2000 then suffer a flood loss. The flood loss could cover up to $350,000 compared to not having flood insurance and getting maybe $5000 from disaster assistance.
As you can see not having flood insurance can really slow down a disaster recovery period after a flood disaster. So if you have flood insurance questions or want to know what options are available in Nebraska click the link below to learn more. You can also visit our website Flood Insurance Guru, our YouTube Channel, or Facebook page The Flood Insurance Guru where we do daily flood education videos.
In this video we discuss the recent extension of the National Flood Insurance Program. What does it mean for you? Watch this video to see how you might be impacted.
How Will Flooding on the Arkansas River Have a Short Term and Long Term Impact on Flood Insurance Rates in Tulsa Oklahoma?
Today we are talking about the recent flooding that has taken place in Tulsa Oklahoma on the Arkansas River. What impacts will this flooding have on future flood insurance rates? What impact will it have on the availability of flood insurance.
The 2019 flooding on the Arkansas river has been devastating it has stopped alot of businesses like The River Spirit Casino from operating. According to CNN they are one of the largest employers in the Tulsa area. So as you can see the flooding can impact everything but how can it impact the future. Well we are going to talk about how it can impact future insurance rates and availability in Tulsa and the rest of Oklahoma.
When flooding occurs it teaches lessons it shows either an area was prepared or not. It shows that area should be a risk flood zone or it should not. Well this is exactly what is occurring in Tulsa Oklahoma. So why do areas that are low risk and areas that are high risk not flood. These areas are known as 500 year and 100 year flood zones. These zones have a probability of flooding within a given year. They are strictly probabilities based on surrounding factors like nearby water and elevations of land. So when these areas many times it teaches FEMA and local flood plain managers that some areas should be higher risk and other areas should be low risk.
As we are seeing these areas in Tulsa along the Arkansas river flood severely it could have a huge impact on future flood insurance rates especially through the National Flood Insurance Program. FEMA tries to review local flood maps every year and sometimes it takes a few years to agree with local officials on a new map. One of the big deciding factors are past floods that are used as historical data in determining future flood insurance maps which will determine flood insurance rates. So the next time Tulsa flood maps are reviewed you may see a big change in who has to have flood insurance and who doesn't.
Another impact that this Tulsa flooding is having is on the immediate availability of flood insurance. When it comes to the National Flood Insurance Program it is always available as long as the program is authorized by congress. However when it comes to private flood insurance they work a little bit differently. When flooding occurs they generally put a moratorium where new business can not be done in these areas until flood warnings are gone. Normally this only last a few weeks but areas of long term flooding like Nebraska and Iowa have shown us that this can occur for six months.
As you can see the current flooding in Tulsas Oklahoma is having short term and long term impacts on flood insurance options. Its very important that you work with a flood insurance expert like The Flood Insurance Guru so you always know what flood insurance options are available.
If you have questions about flood insurance you can always visit our website Flood Insurance Guru.
You can also visit our YouTube channel or Facebook page where we do daily flood education videos.
Disaster assistance, flood insurance, and disaster loans can always be confusing. What applies to what situation? Can they be used together? Let's talk about that a little bit so we can help prepare you when you have a flood loss.
First of all remember, disaster assistance and SBA loans are only going to be there when there's presidential declarations are put in place and you've met those restrictions. SBA loans, which is basically the main loan the government uses for disaster loans, is going to have income restrictions. So it could be that you can't get financing or you can't get help other areas. And this is where SBA loans come into play.
So here's the question though, if you have got disaster assistance, can you get a SBA loan? The answer to that question is yes. What happens is SBA loans can cover up to $200,000. So let's say that you have $80,000 in damage and disaster assistance covered $40,000. So let's say that an SBA loan could cover up to $200,000. They're going to take out whatever you got on disaster assistance. So what if you had insurance? Well, an SBA loan is going to do the same thing. They're going to take out whatever you got from maybe disaster assistance and insurance. So let's say those two combined for $180,000, then you might get an extra 20 grand from doing a small business loan, if it covers up to $200,000.
The other key area where SBA loans come into play is just simply doing the application. We get a lot of questions from people if I do an SBA application in the middle of the disaster assistance process, am I going to lose my disaster assistance? Am I going to get delayed?" The answer to that question is no. Not only that, but applying, simply just applying for an SBA loan could open up other areas what are called other needs assistance through the FEMA grant. This could be uninsured furniture, uninsured personal property, and even uninsured vehicles could possibly be covered up to $40,000 in damage. So these are the important things when it comes to disaster assistance, disaster loans and insurance.
Just remember, it's not an and or world you could end up having all three put together. Now you might have very limited coverage when it comes to disaster assistance and an SBA loan because flood insurance, if you've got it listed correctly, should have up to $250,000. You should have additional living expenses listed on that flood insurance policy so you don't have to worry about that. You should have replacement cost if it's outside the National Flood Insurance Program. So make sure that you max out your flood insurance policy because it's the best thing money can buy when it comes to a coverage standpoint.
So when you're doing this, just make sure to max that out. What's going to happen then is you might have a $250,000 replacement policy and you might have $100,000 on contents. So maybe you do need more than that on personal property. Maybe you can get some other needs covered under grants through FEMA. But remember, insurance is the first defense, then assistance is there, and if the assistance doesn't cover it, then that's when you go and look for a disaster loan.
So if you've got questions about disaster loans or disaster assistance, remember, you can always go to disasterassistance.gov or femawww.fema.gov.gov. You can also visit our website regarding flood insurance and these other disaster assistance, disaster loan questions, floodinsuranceguru.com. Also, remember to like our Facebook page and our YouTube channel, The Flood Insurance Guru, where we do daily flood education videos. You can also give us a call, 205-451-4294.
Losing everything to a flood can be devastating but so can the days afterwards. Knowing what to do after the flood might be just as important as what to do before the flood. Today we are going to talk about 5 reasons why disaster assistance could be declined and how to avoid them.
Before we understand why disaster assistance can be declined we must understand what it is and when its is available?
So what is disaster assistance? Disaster assistance is assistance from FEMA after a natural disaster and is available after presidentially declaration.
So lets discuss why disaster assistance might be declined. The first reason is if the primary home is still livable. What this means is even though you might have suffered flood damage there was not enough damage to force you out of the home because of the severity of damage.
Another reason is FEMA could not reach you to do the inspection of the home. Its extremely important that if you can not live in the home that you give an address where you can be found and a good contact number.
Reason 3 why disaster assistance could be denied is if your flood insurance covered all the damages. This always brings up the question can i still get assistance if i had flood insurance. Yes many times flood insurance won't cover all the things you need and may not cover temporary living expenses at all.
Reason 4 probably comes from the frustration of trying to get resources as quickly as possible. Many times multiple people in the same household will apply for disaster assistance and this causes other people in the home to be declined. So remember when applying for disaster assistance only one person per household can get it. This will hopefully help you avoid being declined.
Reason 5 might be one of the most common reasons for being declined and that is identity issues. Many times people will list a first name but not a legal name. This causes an issue with matching the claimants name and social security number. So make sure to list your name exactly the way it is on your social security card. The biggest area this causes a problem is people who have recently gotten married and have not changed the name legally yet.
There are alot more than 5 reasons why disaster assistance might be declined but these are 5 more common reasons. So if you have questions about disaster assistance or flood insurance please visit our website Flood Insurance Guru. You can also subscribe to our YouTube channel or like our Facebook page where we do daily flood education videos.
What is the National Flood Insurance Program continuous coverage rule? What qualifies and what doesn't? We are going to discuss that a little bit.
The continuous coverage rule states that a property has had continuous coverage on it through the National Flood Insurance Program. Continuous coverage goes away if a policy has lapsed for payment. So when the policy is reinstated the continuous coverage discount goes away which can be significant. The way NFIP looks at this rule is like customer loyalty they are giving a credit for having continuous coverage. As a result a customer maybe receiving a discount because they have had a flood policy when the flood zone was different or a lower risk zone.
Its important to understand when selling a home how to keep the continuous coverage rule in place correctly. If you do a policy transfer or assumption then the continuous coverage rule on the property can stay in place. However if you take out a new policy then the continuous coverage rule would not be in place. So its very important to understand the correct process of doing a policy assumption.
Its also important to pay attention to flood zone changes as these change frequently. So if your flood zone is changing from a flood zone X or low risk flood zone to a flood zone A or AE which is a high risk zone then make sure to take this flood policy out before the change. This way it will qualify for continuous coverage when the zone changes and could make selling your property easier.
So if you have questions about continuous coverage, what the discount is, or if you qualify please visit our website Flood Insurance Guru. You can also subscribe to our YouTube Channel or like our Facebook page where we do daily flood education videos. Remember we have an educational background in flood mitigation so we can help you understand your flood insurance, risks, and mitigating your property long term.