The federal government is consistently working on the Federal Emergency Management Agency (FEMA) in order to provide proper flood protection and mitigation for residents across the country. We've covered that one of the steps is to become a participating community in the National Flood Insurance Program (NFIP), but this isn't a simple sit-down and settle the thing. In order to be able to start participating with the NFIP, you have to follow the proper pacing set by Congress.

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

Let's talk about the initial phase of becoming a participating community in the NFIP, the Emergency Program, and figure out what it is, its benefits for you as a property owner, and your flood insurance options while you're in this program.

National Flood Insurance Program's Participating Community

Other than encouraging communities to adopt and enforcing floodplain management regulations in order to reduce the flood damage from future floods and developing flood maps of flood hazard zones, the NFIP's main goal is providing affordable flood insurance for homeowners across the country.

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

In order to obtain this, FEMA, the National Flood Insurance Program (NFIP), and the community must be in agreement to voluntarily participate in the NFIP's flood mitigation efforts. When this happens, the participating community will get access to the federal flood insurance policy, disaster aid, and disaster grants. In order to continue participating, however, the community must follow and abide by the guidelines and floodplain management ordinances set by FEMA. Doing this also means generates points through what's called Community Rating System (CRS), the more points a community has, the higher benefits they get in form of discounts on flood insurance premiums.

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

These discounts start at around 5% and can go up to 45% on your flood insurance rates depending on your participating communities' efforts in reducing the general flood risk for the area. Rates for flood insurance can really be expensive especially for those in high-risk flood zones or special flood hazard areas (SFHA). 

But before you get to becoming a fully-fledged participating community, you'll be put in the Emergency Program first. 

NFIP Emergency Program Flood Insurance Coverage

Now, when you're starting with the NFIP participation program, your community will have to start with the Emergency Program. It's important to recall that when you're doing a flood policy with federal flood insurance, your overall flood coverage from flood loss and flood damages will be capped. This means that you're going to have coverage limits since the National Flood Insurance Program (NFIP) has a max of $250,000 for building coverage for a residential property. This can only go up to $500,000 if the building listed is commercial property. Regardless of the property type, a standard flood insurance policy from the NFIP will provide $100,000 max for contents coverage or personal property.

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

This is generally what you can expect once you go past the Emergency Program however if you're still in the initial phase of participating with the National Flood Insurance Program (NFIP), your coverage against flood damage is capped at $35,000 only. Considering property value nowadays, this isn't even half of what you might lose due to flooding. So, what if this isn't the right thing for you?

Flood Insurance Options

You can still go through with your community's participation with the NFIP despite having the downside of the Emergency Program's capped coverages. It's important to note that once your property starts participating, you can go through FEMA for your flood insurance.

On the other hand, there's a more viable flood insurance company compared to this that can really help you recover and prepare for the possible losses from flood events: private flood insurance.

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

Private insurance companies also provide flood policy for a much lower flood insurance premium compared to the National Flood Insurance Program. Now that your loan type won't really get in the way of getting flood insurance from private insurers, you can go with this flood insurance market. What's in it for you?

First, let's talk about the process purchase of flood insurance in the private market. When you start your flood insurance purchase with the NFIP, you may have to follow a 30-day waiting period whereas the private flood generally takes up to 15 days max for your policy to take effect after the initial date of purchase. This goes the same for flood insurance claims wherein it takes a much shorter amount of time to be completed.

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

More importantly, there's basically no maximum amount when it comes to limits of coverage. This is because private flood doesn't really do a capped amount for coverages. You can get more than $250,000 and even up to $10,000,000 for the listed building affected by flooding — or should we say buildings since you can list multiple structures in a single policy which is something that you'd need a separate policy for if you're doing a National Flood Insurance Program policy. Contents coverage can go up to $1,000,000 or even more. Apart from these, you also get additional coverage with your policy such as additional living expenses, replacement costs, and loss of use.

Overall, the choice of which flood insurance road you'll take is solely in your hands. You can wait out the participation process and do your best to help rate your CRS or you can move into the private market with its own risks like the chance of the private company deciding to pull away from your area and non-renew flood policies. At the end of the day, any form of insurance is better than having no insurance considering how flooding and disasters can happen in an instant. 

The Flood Insurance Guru | Blog | Flood Insurance Options for Communities in the Emergency Program

Remember, we have an educational background in flood mitigation, so if you have any questions on flood insurance options, flood zones, flood map changes, or anything about flood, please reach out to us. You can also check out our daily flood education videos over at our YouTube channel, so you too can be prepared when you face flood water.

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The Flood Insurance Guru | 2054514294Get Your Quote from Flood Insurance Guru    The Flood Insurance Guru | Chris Greene | YouTube    


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