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When you think of Southern California what do you think of?

Well most people think of sunshine and beaches, however that's only half the story.

During the summer months Southern California generally has sunshine and very little rain fall. However this completely changes as California enters what is referred to as cold season.

In Southern California cold season are the months of November to March, this is generally when this area gets most of its rainfall. Its not unusual for Southern California to get very little rain fall and then more than 10 inches of rain in the cold season.

This is exactly how cold season has started off in 2019. Parts of Southern California received more than 3 inches of rain over the Thanksgiving holiday weekend. This caused alot of flash flooding.

This flash flooding became a bigger problem for a couple of reasons.

  1. Recent wild fires removed protective vegetation
  2. Unusually dry land left water no where to go

Wildfires have become a major problem for California over the last few years. In the past trees and brush would have soaked up a lot of water. However recent wildfires have destroyed a lot of these things causing bigger flashing flooding problems.

Southern California and Arizona both have a similar problem where they deal with unusually dry conditions so when it does rain its so dry the land can not soak up the rainfall.

Is Flood Insurance available for Wet Season in California?

 

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

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

National Flood Insurance Program and private flood insurance

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

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

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

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

 

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

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

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

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

 

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

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

While the short answer is yes, there are two things you need to understand about flood insurance in California

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  1. Fees
  2. Minimum earned premium

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

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

What is a minimum earned premium?

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

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

We have talked about the flood insurance options that are available in California but when do these policies actually go into place.

If you are talking about the National Flood Insurance Program there are three different waiting periods.

  1. Standard 30 day wait period
  2. Newly Mapped area 1 day wait period
  3. Loan closing no wait period

The private flood insurance market has some different wait periods.

  1. Standard wait period ranges from 5 to 15 days
  2. Loan closing no wait period

Its very important to understand these wait periods for flood insurance in California. While a policy will show effective claims would not be paid out until these wait periods have expired

If you have further questions about wet season or flood insurance options in California make sure to visit our website. You can also check out our daily flood education videos on our YouTube channel and Facebook Page The Flood Insurance Guru. If you are more into podcast make sure to check out our Flood Podcast.

 

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Chris Greene

Author

Chris Greene

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