For a long time commercial property owners in Alabama have felt they only had one option for flood insurance. However over the last 15 years private flood insurance companies have made a major push.

 

For the longest time private flood insurance companies could not figure out a profitable that also gave them predictable models. As technology has developed these changes have started to push the private flood insurance industry in Alabama forward.

So is the National Flood Insurance Program still the best option for your Alabama commercial property?

Let's look at some changes coming to the National Flood insurance program. The first is rate increases up to 25% on non primary residence properties.

 

This could have a major impact on investors and investment properties.

It could also impact people like apartment building owners.

 

Some other changes scheduled to happen is NFIP Risk Rating 2.0.

 

Everyone is not sure about the overall total impact of this new program. However the closer you are to water it could have a major impact on your bottom line.

So with these changes coming it could significantly the pockets of investors. Before deciding if its still the best option we need to look at some coverages the National Flood Insurance Program does not offer.

As a Huntsville business owner one of the biggest exposures to you could be loss of income. What if you have a restaurant along the Tennessee River and it floods.

 

How would the restaurant stay open when it recovers from this disaster?

This is where loss of income can come into play. This can be a great benefit of private flood insurance in Alabama. The National Flood Insurance Program does not offer loss of income on its flood policies.

As the National Flood Insurance Program continues to increase prices it also has property owners in areas like Montgomery and Birmingham Alabama searching for a cheaper commercial flood insurance option.

So is commercial flood insurance cheaper in Alabama?

It depends on a lot of factors like the flood score, loss history, and location.

Its not unusual to get a commercial flood policy in areas like Huntsville or Birmingham Alabama that is 30-40% less.

 

However in areas of east Alabama like Gadsden, Oxford, and Anniston where losses have occurred in the past rates could be higher or they may not do a policy on the property at all.

It's important to understand what commercial flood insurance options are available in Alabama and when you can make the switch to private flood insurance.

If you want to learn more about this then click here and we can reach out to you.

You can also check out our YouTube channel where we do daily flood education videos or our podcast.

Remember we have an educational background in flood mitigation which means we are here to help you understand your flood insurance, flood risk, and mitigating your property long term.

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

 

Flood Insurance can be confusing especially has often as the rules change. Your rate might go from $500 a year to $2500 a year with not much explanation.

Today we hope to eliminate some of that confusion for you.

Before we get into that I want to tell you a story about a property owner in Marion Illinois.

This property owner had 4 investment properties that were all in the preferred flood zone also known as flood zone x.

The premium on the first 3 properties was $790 for each property and the 4th property was $2690 a year.

Holy cow that is a difference

So why such a big difference in premium?

In order to understand the difference in premium we must understand what the National Flood Insurance Program defines residential and non residential properties as being.

According to FEMA in order for a property to be considered residential 75% of the building must be used for residential purposes.

So what about those properties that are not?

Well different rating models could come into play which would explain the difference for the property owner we discussed.

If you are an investor or commercial property owner its important to understand these things. They could have a major impact on your profitability.

So is there any way around these higher premiums?

Well there are many options in the private flood insurance market that look at these risks differently.

They may not charge you differently if it is being used for residential or non residential purposes.

So when purchasing a property you want to look at how this property is used now and how it will be used in the future.

Flood insurance options

So if you have further questions on how to understand residential and non residential flood insurance make sure to visit our website.

You can also checkout our YouTube channel where we do our daily flood education videos or our podcast. You can also find this episode below.

 

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

 

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