Flood Insurance in Cullman Alabama:

Everything You Need to Know

Cullman, Alabama is no stranger to flooding. Located in the northern part of the state, the area is prone to heavy rainfall and flash floods. With the potential for damage to homes and businesses, flood insurance is an important consideration for those living in the area.

Flood insurance is a type of insurance policy that covers damage caused by flooding. Unlike standard homeowners insurance policies, flood insurance is not typically included and must be purchased separately. In Cullman, flood insurance is available through the National Flood Insurance Program (NFIP) and private insurance companies. It is important to note that there is typically a 30-day waiting period before the policy goes into effect, so it is important to plan ahead.

 

Understanding Flood Insurance in Alabama

Flood insurance is a type of insurance that protects homeowners and renters from losses due to flood damage. It is important to understand that standard homeowners insurance policies do not cover damage caused by floods. Flood insurance is a separate policy that must be purchased through the National Flood Insurance Program (NFIP) or a private insurer.

In Cullman, Alabama, flood insurance is particularly important due to the city's location near the banks of the Mulberry Fork of the Black Warrior River. The area is prone to flooding, and homeowners and renters should be aware of their options for flood insurance.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

The NFIP offers flood insurance policies for homeowners, renters, and businesses in Cullman. These policies provide coverage for damage to the structure of the building as well as its contents. It is important to note that there is a 30-day waiting period before coverage begins, so it is important to purchase flood insurance well in advance of any potential flooding.

Flood insurance premiums are based on a number of factors, including the property's location, the type of coverage needed, and the value of the property and its contents. Homeowners and renters should work with their insurance agents to determine the appropriate coverage and premium for their specific situation.

 

In summary, flood insurance is a crucial component of protecting your home or rental property in Cullman, Alabama. Homeowners and renters should be aware of their options for flood insurance, work with their insurance agent to determine the appropriate coverage and purchase flood insurance well in advance of any potential flooding.

Why Flood Insurance in Cullman Alabama?

Cullman, Alabama is a beautiful city that is located in the northern part of the state near Smith Lake. It is known for its rich history, beautiful scenery, and friendly residents. However, like many other cities in the United States, Cullman is also prone to flooding. This is why flood insurance is so important for homeowners and business owners in the area.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

Flood insurance is a type of insurance that is designed to protect property owners in the event of a flood. It covers damage to buildings and personal property caused by flooding. This can include damage from storm surges, heavy rainfall, and other types of flooding.

In Cullman, flooding is a common occurrence and recent flooding events in 2023 have left many people in a financial hole. The city is located near several rivers and creeks, which can easily overflow during heavy rainstorms. In addition, the city is located in a low-lying area, which makes it more susceptible to flooding.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

Without flood insurance, property owners in Cullman could face significant financial losses if their property is damaged by flooding. Flood damage can be expensive to repair, and it can take a long time to recover from the damage. This is why flood insurance is so important for property owners in the area.

In conclusion, if you own property in Cullman, Alabama, it is important to consider purchasing flood insurance. This type of insurance can provide you with peace of mind and financial protection in the event of a flood.

Coverage of Flood Insurance for Homeowners

Flood insurance provides coverage for damages caused by flooding, which is not covered under standard homeowners insurance policies. In Cullman, Alabama, flood insurance is particularly important due to the area's susceptibility to flash floods and heavy rains.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

Building Property Coverage

Building property coverage or structure of your house is designed to protect the physical structure of a home or business from flood damage. This includes the foundation, walls, electrical and plumbing systems, and built-in appliances. The coverage limit for building property is $250,000 for residential properties and $500,000 for commercial properties.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

It's important to note that flood insurance does not cover every type of water damage. For example, if water damage is caused by a leaky pipe, it would not be covered by flood insurance. However, if the water damage is caused by a flood, it would be covered under the building property coverage.

Personal Property Coverage

Personal property coverage is designed to protect the contents of a home or business from flood damage. This includes furniture, clothing, electronics, and other personal belongings. The coverage limit for personal property is $100,000 for residential properties and $500,000 for commercial properties.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

It's important to keep an inventory of personal belongings in case of a flood. This will make it easier to file a claim and ensure that all damaged items are accounted for. Additionally, some high-value items such as artwork or jewelry may require additional coverage beyond the standard personal property limit.

See If Flood Insurance is Required

Overall, flood insurance can provide peace of mind and financial protection in the event of a flood. It's important for residents and business owners in Cullman, Alabama to consider purchasing flood insurance to protect their property and belongings.

How to Buy Flood Insurance in Cullman AL

 

Where to buy flood insurance in Cullman Alabama

Flood insurance can generally be purchased through any property and casualty insurance agent in the Cullman Alabama area. However, it is recommended that you speak to an independent insurance agency that offers the National Flood Insurance Program and at least 3 different private flood insurance options. You want to ask them the following things

  • What is my flood risk
  • What is my flood zone
  • How much flood insurance coverage do I need
  • What is the average cost of flood insurance in Cullman Al

In case they can't answer these questions for you we are going to give you the answers below.

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Private Insurance Companies 

When looking to buy flood insurance in Cullman AL, individuals have the option to purchase coverage through private insurance companies. These companies offer policies that are separate from the National Flood Insurance Program (NFIP) and may provide additional coverage options.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

To purchase flood insurance through a private insurance company, individuals can contact their local insurance agent or do research online to find a company that offers flood insurance in their area. It is important to compare coverage options and prices from multiple companies to ensure that the policy meets individual needs and budgets.

Some private insurance companies may require a flood zone determination to be conducted before issuing a policy. This determination will assess the risk of flooding in the area and may impact the cost of the policy.

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National Flood Insurance Program

The National Flood Insurance Program (NFIP) is a federal program that provides flood insurance to homeowners, renters, and business owners in participating communities. To purchase flood insurance through the NFIP, individuals can contact their insurance agent or visit the NFIP website.

The NFIP offers both building and content coverage, and NFIP policies can be purchased separately or as a package. The cost of the policy will depend on factors such as the property's flood zone, the amount of coverage needed, and the deductible chosen.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

It is important to note that there is typically a 30-day waiting period before a flood insurance policy becomes effective. This means that individuals should purchase flood insurance before a flood is imminent to ensure that they are adequately protected.

In conclusion, whether purchasing flood insurance through a private insurance company or the National Flood Insurance Program, individuals in Cullman AL should carefully consider their options and choose a policy that provides adequate coverage for their needs.

Flood Insurance Claims Process

Filing a flood insurance claim can be a daunting task, but it is essential to ensure timely reimbursement for damages and proper payout caused by flooding. Here is a brief overview of the flood insurance claims process in Cullman, Alabama:

  1. Report the Flood Damage: The first step in filing a flood insurance claim is to report the damage to the insurance company. The policyholder should contact their insurance company as soon as possible to report the damage. In most situations, you have 60 days to provide proof of loss letter. The insurance company will assign an adjuster to assess the damage and determine the amount of compensation and repair costs.

  2. Document the Damage: The policyholder should document the damage by taking photographs or videos of the affected property. They should also make a list of damaged items and their estimated value. This information will be required when filing the claim and help you feel confident that you pick the right coverages you need. If you have NFIP coverage payouts may vary depending on the amount of coverage.

  3. Meet with the Adjuster: The adjuster will schedule a meeting with the policyholder to assess the damage in person. During the meeting, the adjuster will inspect the property and document the damage. The policyholder should provide any additional information or documentation that may be required.

  4. Receive the Claim Payment: Once the adjuster has completed the assessment, the insurance company will determine the amount of compensation and issue the payment. The payment may be made in one lump sum or in installments, depending on the policy terms.

It is important to note that flood insurance claims can take time to process, especially in the event of a widespread flood. The policyholder should stay in contact with their insurance company and provide any additional information or documentation that may be required. It is also important to note that NFIP coverage does not include living expenses.

Flood Insurance Rates in Cullman, AL

Flood insurance rates in Cullman AL can be cost-effective depending on several factors. So what is the cost of flood insurance? Well, let's look at The National Flood Insurance Program (NFIP) which sets the rates for flood insurance policies. The rates are determined based on the property location, flood risk, and the type of coverage selected.

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For properties located in high-risk flood zones, the flood insurance rates in Cullman AL are typically higher than those located in low-risk zones. The NFIP uses flood maps to determine the flood risk of a property. The maps show the likelihood of flooding in a particular area. Property owners can use the maps to determine their flood risk and the corresponding flood insurance rates.

Find My Flood Risk & Flood Rate

The type of coverage selected also affects the flood insurance rates in Cullman AL. The NFIP offers two types of coverage: building property coverage and personal property coverage. Building property coverage protects the physical structure of the building, while personal property coverage protects the contents of the building.

The following table shows the average flood insurance rates in Cullman AL for building property coverage and personal property coverage:

Type of Coverage Average Annual Premium
Building Property $1,000 - $3,000
Personal Property $100 - $300

It is important to note that flood insurance rates in Cullman AL can vary significantly from the average rates listed above. Property owners should contact an insurance agent to get a personalized quote based on their specific property location, flood risk, and coverage needs.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

Private Flood Insurance in Cullman Alabama

Private flood insurance markets in the Smith Lake area or even the Athens or Huntsville Alabama area range based on the flood risk of the property. You may get one rate in a low-risk flood zone and a different rate in a high-risk flood zone or moderate-risk area.

Flood insurance rates with private flood insurance may range from $300 a year to $3000 a year. Is private flood insurance the best flood insurance in Cullman Alabama?

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

It depends on the coverage and pricing you can get. You want to make sure to look at the policy jacket this is the full policy and look at any exclusions. Many flood insurance policies only cover surface water and exclude coverages for basements many times.

You should definitely at least consider flood insurance from a private flood insurance company as many homeowners are unaware that it is an option.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

Get the flood insurance quotes from 3 different private flood insurance companies and compare rates with the National Flood Insurance Program. Remember all flood insurance policies are done on an annual cost basis. This means things like 6-month rates on auto insurance do not exist.

5 Tips When Purchasing Flood Insurance

Flood Zones in Cullman AL

Cullman County is located in North Alabama and has a diverse topography that includes mountains, valleys, and rivers. Due to its location, Cullman is vulnerable to flooding caused by heavy rainfall, flash floods, and riverine flooding.

The Federal Emergency Management Agency (FEMA) has designated flood zones in Cullman County based on the likelihood and severity of flooding. Property owners in these zones are required to purchase flood insurance if they have a federally-backed mortgage.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

The flood zones in Cullman County are classified as A, AE, AH, AO, and X. The A, AE, AH, and AO zones are considered high-risk areas and are more likely to experience flooding. The X zone is considered low-risk, but property owners are still encouraged to purchase flood insurance.

The following table provides a summary of the flood zones in Cullman County:

Flood Zone Description
A Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage
AE Areas with a 1% annual chance of flooding and a 26% chance of flooding over the life of a 30-year mortgage. These areas also have additional hazards associated with wave action
AH Areas with a 1% annual chance of shallow flooding (depths of 1-3 feet) and a 26% chance of flooding over the life of a 30-year mortgage
AO Areas with a 1% annual chance of shallow flooding (depths of 1-3 feet) and a 26% chance of flooding over the life of a 30-year mortgage. These areas also have additional hazards associated with sheet flow
X Areas with a minimal flood risk

Property owners in high-risk areas are required to purchase flood insurance, but those in low-risk areas are not. However, it is important to note that flooding can occur in any area, and property owners are encouraged to purchase flood insurance even if they are not required to.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

In conclusion, Cullman County has several flood zones designated by FEMA based on the likelihood and severity of flooding. Property owners in high-risk areas are required to purchase flood insurance, while those in low-risk areas are not. It is important for property owners to be aware of their flood zone and to consider purchasing flood insurance to protect their property from potential flood damage.

FAQs on Flood Insurance in Cullman AL

Floods are a common occurrence in Cullman AL, and it is important to have flood insurance to protect your property. Here are some frequently asked questions about flood insurance in Cullman AL:

  • What is flood insurance? Flood insurance is a type of insurance that protects your property and belongings from damage caused by flooding. It is not included in standard homeowners or renters insurance policies and must be purchased separately.

  • Do I need flood insurance? If you live in a flood-prone area in Cullman AL, it is highly recommended to have flood insurance. Even if you do not live in a high-risk area, floods can still occur and cause significant damage.

  • How much does flood insurance cost? The cost of flood insurance varies depending on several factors, including the level of risk in your area, the value of your property, and the type of coverage you choose. It is best to contact a licensed insurance agent to get a quote.

    2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding
  • What does flood insurance cover? Flood insurance covers damage to your property and belongings caused by flooding. This includes damage to the structure of your home, electrical and plumbing systems, appliances, furniture, and personal belongings. It may also cover the cost of temporary lodging if your home is uninhabitable due to flood damage.

  • What does flood insurance not cover? Flood insurance does not cover damage caused by other types of water damage, such as a burst pipe or sewer backup. It also does not cover damage to your car, as that is covered under a separate auto insurance policy.

  • How do I purchase flood insurance? Flood insurance can be purchased through a licensed insurance agent. It is important to purchase flood insurance before a flood occurs, as there is typically a 30-day waiting period before coverage takes effect.

It is important to have flood insurance to protect your property in Cullman AL. Contact a licensed insurance agent to learn more about your options for flood insurance coverage.

Conclusion

In conclusion, flood insurance is an important consideration for homeowners and business owners in Cullman, Alabama. While it is not required by law, it is highly recommended to protect against the financial impact of flood damage.

Homeowners should consider the risk of flooding in their area and evaluate the cost of flood insurance compared to the potential cost of flood damage. Business owners should also consider the impact of flood damage on their operations and finances, and ensure that their insurance policy covers any potential losses.

2023 Flood Insurance in Cullman, Alabama: Protect Your Home from Flooding

It is important to note that flood insurance policies have specific limitations and exclusions, and may not cover all types of flood damage. Homeowners and business owners should carefully review their policies and understand the coverage and limitations.

Overall, flood insurance is a valuable investment for those living or operating a business in flood-prone areas such as Cullman, Alabama. It provides peace of mind and financial protection in the event of a flood and can help to minimize the impact of flood damage on individuals and businesses.

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Better watch out and bring out your umbrella with you if you're in Alabama. This may get rough soon!

Alabama is expected to receive rain starting Thursday, February 3rd, and until Friday, February 4th. This is pretty normal if you'd think about it however there are some flooding concerns that may be seen during this time.

Alabama Faces a Potential Flood Event in 2022

In today's blog, we want to talk about this weather event in Alabama and the flood concerns arising from it.

Heavy Rain Brings Higher Waters

Alabama is up in arms as weather forecasts expect heavy rainfall to drop on the state. This heavy rainfall is expected to be averaging 2 to 4 inches of rain and will persist from Thursday to Friday as reported by the National Weather Service (NWS). Flood watches are being sent out already since we are already expecting 3 to 6 inches of heavy rain getting dumped on Alabama just for the night of February 3rd. This means that flash flooding has an up to 10% chance of happening across the state.

This event is also expected to have some major storms as seen by the National Oceanic and Atmospheric Administration (NOAA) which places the south and south-central parts of the state at a marginal risk for severe weather this Thursday.

Alabama Faces a Potential Flood Event in 2022Photo courtesy of NOAA

This puts cities Mobile, Montgomery, Greenville, and Tuscaloosa at a high chance of facing an isolated major storm in the next two days. These types of storms usually create the biggest concerns are damaging wind gusts, which could take down trees and knock out power, and tornadoes.

After Friday (February 4th), the rain will begin to move out however it doesn't really mean that everything ends there since there are chances of additional rain happening during the weekends because the cold air will be rushing behind.

Flood Concerns

One of the biggest concerns that we should be aware of is that this type of weather event will surely create big flood threats and increase the overall flood risk for the whole state in the next two days.

This ranges from what we call a pluvial flood, where collected water has nowhere else to go so it starts to pile up and inundate the area. This isn't really impossible considering that we still haven't moved out of the winter season. During this time, we expect the ground to be oversaturated which generally means that it won't be able to take in as much water as it should.

Another reason why flooding may occur from a life-threatening storm surge as water levels rise due to the precipitation. This is most likely to happen in coastal Alabama like Mobile City. Generally, this means that we might see a cocktail of floods as all three types may occur during this weather event: pluvial, fluvial, and coastal flooding.

Alabama Faces a Potential Flood Event in 2022

Fluvial flooding is only different from pluvial because the source of the floods comes from a water source like a river, lake, pond, creek, and such. Generally, this type of flood has a very strong flow to it and most of the time can easily damage properties along its path.

Other than these flood concerns, when that rain starts to happen, it's most likely that roads and bridges are going to be slippier than ever. This is why we always remind people to not drive into standing water or flood, or even during a rain event like this if it's not really necessary. We don't want to be dark and grim, but most of the casualties and injuries that happen in times like this are located and involve roads.

Why Flood Insurance is Important

When it comes to floods, most people would say that they wouldn't want to leave their properties unattended because something might happen to them. This same thinking causes a lot of trouble for these property owners when water starts to inundate the property.

Flood insurance can really help you cover for this flood damage and flood loss that may occur during a time like this. More importantly, you get peace of mind that you will still have a home to go back to even after a flood.

You have two options when it comes to flood insurance in Alabama: the federal-backed National Flood Insurance Program (NFIP) and its new Risk Rating 2.0, and Private Flood Insurance. Let's talk about these two.

NFIP

The federal flood insurance is gearing towards a fingerprint of flood risk for properties that get a policy from them since rates will be based on the individual flood risk. Although this makes it more affordable for flood insurance coming from FEMA, this may still bring an increase to rates for some property owners.

This type of change makes them a big contender to take the spot when you ask people where best to get flood insurance however it's integral to point out that other than how you're going to be rated, some things never change with the National Flood Insurance Program (NFIP) flood insurance.

When it comes to coverage, we're still talking about the same $250,000 maximum on dwelling or building coverage and $100,000 maximum when it comes to contents

Other than these, these are all that the federal government can offer when it comes to flood insurance even with the Risk Rating 2.0 update. Here's a quick breakdown of the NFIP 2.0 card compared to the current version we have at the time of writing:

Alabama Faces a Potential Flood Event in 2022

Private Flood

Private flood insurance has made a big push in the last 15 years. There have been a lot of changes in the last 5 years that allow private flood insurance to be a great flood insurance option for many property owners. Let's look at exactly what private flood insurance is.

For many years the only option for many property owners was the National Flood Insurance Program (NFIP). There were many limitations with this program like wait periods, coverage amounts, and cost of the policy.

It's important to understand not all private flood insurance options are the same. There are admitted and non-admitted carriers in the private market. Each one of these types of policies has different requirements they follow.

The private flood insurance market still offers flood coverage that doesn't really have any maximum amount. You can definitely still get more than $250,000. Even when it comes to personal items or contents coverage, you can definitely go more than $100,000 for flood damage. That coverage also comes with the loss of useadditional living expenses, and/or replacement costs.

We've also seen a lot of homeowners coming to us for flood insurance and were able to get it in just a few days. The maximum waiting period for a flood policy from a private insurance company is only 14 days.

Alabama Faces a Potential Flood Event in 2022

What This Means for the Future

Considering that both Risk Rating 2.0 and private flood insurance companies base flood insurance rates on flood risks, this type of weather event can really add up to the things that increase your risk of flooding. This can also be a hard-hitter when it comes to flood mitigation since more risks require more efforts to lessen the flood damage on your property.

If Alabama were to get dumped by heavy rainfall more frequently, this could mean that flood insurance rates will also skyrocket in most areas especially when such rain event causes huge flooding in the area.

We're starting the Month of Arts and Hearts with such a concerning scenario, so we hope that you stay safe during this time. If you really don't need to head out, please stay at home and follow your local government's guidelines on what to do when flooding starts to happen. The thing is flooding can happen anytime.

So if you've got questions on flood insurance in Alabama, what this rain event could mean for your flood risk score, or anything related to flood insurance, click below to access our Flood Learning Center.

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If you want to speak to us about your flood concerns, click below to contact us:

The Flood Insurance Guru | 2054514294

Remember, we have an educational background on flood mitigation which lets us help you understand flood risks, flood insurance, and protecting your property long-term.

Business is booming as some would say to the real estate market in Alabama. Despite being in a pandemic, somehow real estate was able to keep up with the times. 2021 was one of these proofs as Alabama had an increase of 3.9% year-over-year (Y/Y) in real estate sales during the month of August.

Alabama Real Estate: Buying Properties in a Flood Zone

It's no secret that some of these listings sit on a high-risk flood zone, so today, we want to talk about things every realtor needs to know when it comes to buying and selling a property that's in a flood zone.

This is part one of a two-parter blog and for this article, we want to focus on the buyer's side of real estate.

Loan Types & Flood Insurance Options

When it comes to closing a house, most buyers don't really have the luxury to pay it all in cash. This is why loans exist to help ease up the expenses in maintaining a roof above your head. If you're reading this blog, you're most likely to be familiar with mortgages and how it works.

What you might not know is that mortgages and loan types can actually impact your flood insurance too.

You see, depending on the type of loan you have for your property, you'll get different options when it comes to flood insurance. We have different types of loans and we actually covered this topic on our podcast blog, but to further understand the situation especially after the Risk Rating 2.0 update with federal flood insurance let's give an example.

Alabama Real Estate: Buying Properties in a Flood Zone

If you have the Federal Housing Administration or FHA loan, you won't be able to get flood insurance through any private insurance carrier because your bank won't accept it. This only means that your only flood insurance source will be from the federal side which is through the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

There was a time that if you have a loan that's under the government such as an FHA loan, Veteran Affairs (VA) loan, or United States Urban Development Administration (USDA) loan, the only option you have is through the NFIP when it comes to flood insurance.

This meant those people with conventional loans are the only ones who can get flood insurance through private companies before. This was changed way back and only homeowners with an FHA loan are required to get flood insurance through FEMA and the NFIP.

So this is important to keep in mind. Consider first what loan type you have in order to get a proper expectation on where you can get flood insurance from.

Flood Insurance Claims

Another thing you want to consider when buying a property is its history of flooding and flood claims history. This way you get to have an immediate idea of the flood risks or flood hazards that the house might face.

It's also important to note that when it comes to flood insurance, you might not get a policy from the private insurance companies once they detect that the previous owner or the property is prone to flooding.

It's important to keep in mind that flood claims aren't like medical insurance claims where it goes wherever you go. What we mean by this is that when you file a flood claim on the property, regardless of who the owner is, the claims will stay with the property basically for its entire life.

Alabama Real Estate: Buying Properties in a Flood Zone

When it comes to the federal side, however, there won't be a refusal to provide flood insurance to properties like this however with the Risk Rating 2.0, having multiple claims on a property is sure to impact the overall costs of your flood insurance premiums with that house. This is what's called the claim variable.

For this one, it's crucial to always know the flood and claims history of the property. This way you protect yourself from unwanted non-renewals as per the carrier's discretion or expensive flood insurance rates.

Flood Insurance Premiums

One of the biggest questions asked by a potential buyer of a house concerns flood insurance rates. This opens the door for asking, "will my premiums skyrocket after I buy the property?"

Alabama Real Estate: Buying Properties in a Flood Zone

The thing about flood insurance premiums is that the rate is generally guaranteed only for 12 months. This means that after that, you may see some changes like a minor increase or decrease. This is considering that you weren't flooded. On the other hand, if the property was recently subjected to flood damage and there was a claim filed for it, the flood insurance premium can increase substantially.

Verifying the Flood Zone

One of the most important things a buyer or realtor should know about a property when it comes to flood insurance is its flood zone. Despite being removed from the rating consideration in FEMA and the NFIP, the private flood insurance market still look at this factor when it comes to rates. This means that flood zones directly impact your rates and risk of flooding.

Additionally, regardless of it being removed from the rating system, flood zones still have absolute control on whether or not the property is required to have a flood insurance policy with that property. Keep in mind that if you fall in flood zone A or AE, also known as high-risk flood zones or special flood hazard areas (SFHA), you're going to be required to carry flood insurance.

 

There are many cases where an incorrect flood zone is put in a policy — maybe because there was a recent flood insurance rate map or flood map update that wasn't known by the seller or confusion between different flood zones.

As a realtor, it's important that you are aware of this as well, if not an expert when it comes to it. A lot of potential buyers get frustrated when they get surprised about this requirement, so as a realtor it's best you let them know ahead of time.

When it comes to selling properties, you really want to help your buyer consider what the flood risk is and the chance of flooding. Some states like Texas actually require realtors and sellers to fully disclose the flood history and claims on a property, but regardless it wouldn't really hurt being transparent about these things. After all, we're talking about the safety of someone moving into a residential property.

If you've got any questions on a flood policy, the flood zone status of the property you're looking to buy, how the floodplain impacts flood zones, or anything related to floods, click below to go to our Flood Learning Center where we try to answer these questions.

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You can also call us if you need a second opinion from a flood insurance agent when it comes to your purchase of a property by clicking below.

The Flood Insurance Guru | 2054514294

Remember, we have an educational background in flood mitigation which lets us help you understand your flood risks, flood insurance, real estate selling and buying, and mitigating your property's value long-term.

The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to Alabama and how they can impact your flood insurance in the future.

The Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

Alabama has been facing a lot of threats when it comes to flood damage and this is something that even homes that aren't in a high-risk flood zone are being impacted severely by floods. This is why it's always important to make sure that you have the best flood coverage with your insurance policy in relation to the premiums that you're paying for.

Here in Flood Insurance Guru, we always believe that the true risk of floods lies in the amount of protection that your insured property has against these impacts of flood waters.

NFIP Risk Rating 2.0

This new program that FEMA is planning to enforce with the National Flood Insurance Program (NFIP) in order to make sure that individuals will no longer pay more than their fair share of flood premiums based on the value of their homes. Most likely, these new risk ratings are going to be in full effect by October this year. Today, we want to discuss the premium rate changes coming to Alabama in order to better prepare ourselves for the upcoming changes.

Generally, this also means that your average flood insurance rates will depend on your property value. It's important to keep in mind that expensive properties may face higher premiums as a result of these rate changes.

Now, when it comes to the Risk Rating 2.0 or NFIP 2.0, you're going to see these ranges that are called green, blue, pink, and grey portions. Each bar represents the good, the bad, and the ugly changes when it comes to premium rates with the NFIP in Alabama. Let's break each one of them down to further get an insight into how these changes can impact you.

The Flood Insurance Guru | Flood Map Updates | Julesburg, Sedgwick County, ColoradoThe Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

The Good

When it comes to the green bar or the green range, this is generally the good change that you can see since this means that there'll be a decrease of more than $100 on flood insurance premiums. Now, this change will be an immediate change once the Risk Rating 2.0 kicks in on October 1st. This is good news for the 11,220 or 21% of policyholders in Alabama since this means you get to save on your premiums starting this October.

The Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

The Bad

Now, let's talk about the bad change which you'll see in that blue range. We're talking about the 36,736 Alabama policyholders or 70% that will experience this change. This is a bad change because we're looking at an increase of up to $10 per month for that 70% of the policyholders in Alabama when it comes to the flood insurance premium you're going to pay. This amount eventually totals to about $120 per year when this change kicks in October.

Now, this may not sound big when it comes to some people however you have to consider that the federal flood insurance or FEMA National Flood Insurance Program (NFIP) continuously updates flood maps, and properties that are sitting on those high-risk flood zones can find this increase very hard to swallow.

The Flood Insurance Guru | Alabama Flood Insurance: New Federal Flood Program Risk Rating 2.0

The Ugly

These ugly changes are what you'll see in the pink and grey bars in that Risk Rating 2.0. Now, we call this ugly because 6% in that pink range which is about 2,991 policies in Alabama, is going to get about a $10 to $20 increase per month. This totals from $120 to $240 per year.

You also want to include in this ugly change the 3% or about 1,706 policies who will experience a rate increase of more than $20 per month which can go way over $240 per year.

This can really be very ugly for property owners who are facing expensive premiums. We mentioned that the premium itself would be different on each individual properties in Alabama; this includes flood map data, flood claims and flood damage history, risk of flooding on your personal property, where the property is sitting when it comes compared base flood elevation levels in that area, and a lot of things.

This type of rate increase might be another reason to move into the private flood insurance market to find a much suitable cost of flood insurance. 

You can see the full graph of these changes below:

When Will It Happen?

Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date. 

On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.

 

So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change. 

If you have questions on these upcoming changes, what are your flood insurance options in Alabama, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.

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