Flood insurance — just like any insurance policy — is bound to have a lot of documents attached to it. It's important to know the purpose of these. In this article, we want to talk about federal flood insurance and what the Federal Emergency Management Agency (FEMA) acknowledgment form is.

Everything You Need to Know about FEMA's Acknowledgment Form

Federal Flood Insurance

Communities across the whole United States have been getting a lot of changes when it comes to flood insurance on the federal side. This flood insurance is managed by FEMA and its most popular carrier, the National Flood Insurance Program (NFIP).

Since April 2022, the whole NFIP system has been moved to follow the Risk Rating 2.0 which changed a lot of things when it comes to flood insurance especially when it comes to premium rates. There are good, bad, and ugly changes with this update however some things simply don't change.

Federal Emergency Management Agency - WikipediaEverything You Need to Know about FEMA's Acknowledgment Form

Just, for example, the definition of flood still stays the same when it comes to flood insurance. If two parcels of land or two properties are impacted by water then this is the only time it will be considered a flood event.

Everything You Need to Know about FEMA's Acknowledgment Form

Another thing that didn't change is how both FEMA and community officials still require flood insurance for properties or sometimes even communities that are in a high-risk flood zone like flood zone A or flood zone AE.

So, if you're thinking of going through FEMA, this information is good to know. Don't worry, we have covered a lot of topics when it comes to FEMA and its changes on our website.

FEMA Acknowledgment Form

When purchasing flood insurance, it's basically tradition at this point that you receive an acknowledgment form of your policy. However, one question that policyholders usually first think of is if this is legit.

Yes, this acknowledgment form is legit and it serves as some proof that you have received a copy of your flood insurance policy. The thing about FEMA is that they don't just have the National Flood Insurance Program (NFIP) to help them support this new "equity in action" objective they have.

Everything You Need to Know about FEMA's Acknowledgment Form

What we mean by this is that due to FEMA being partnered with NFIP as well as Write-Your-Own flood insurance carriers, you may be able to see a different name that's not FEMA as your insurance provider. If you need to know more about Write-Your-Own (WYO) carriers, click here to go to our blog post on this topic.

Now, you might be wondering how you would be able to determine if the acknowledgment form is legit and valid. Well, here are something that you should be able to see with that acknowledgment form.

Declarations Page

This page — sometimes referred to as simply "dec page" — will tell you relevant information about the flood policy. The declarations page should include the name of the intended insured (usually the property owners' name), the property address being insured, the flood insurance carrier, and coverages.

Everything You Need to Know about FEMA's Acknowledgment Form

Before we move forward, it's important to reiterate that the flood insurance carrier isn't always the National Flood Insurance Program (NFIP) as the Write-Your-Own (WYO) carrier's name might be your insurance provider. The declarations page with your acknowledgment form should be able to inform and show you this information.

When it comes to coverage, on the other hand, we need to remember that when doing a flood policy with FEMA, there are some coverage terms and limits you need to know. This includes the $250,000 coverage limit for residential properties and this will only go higher if you're doing a commercial policy with a $500,000 building coverage limit. Regardless of the property type, only a $100,000 coverage limit will be provided for content coverage.

Everything You Need to Know about FEMA's Acknowledgment Form

But what else should you expect when receiving an acknowledgment form in your mail?

List of Flood Losses

Another item that you might be able to see whenever FEMA is sending you this form is the list of the flood losses that the insured property has. Now, this is important as this may also serve as an explanation for your rates considering the claims variable that Risk Rating 2.0 has.

This list helps determine what claims variable the property is in and also helps you understand the potential flood risk you might face due to the property's flood history.

Everything You Need to Know about FEMA's Acknowledgment Form

NFIP Handbook

Lastly, you should be able to receive what's called the NFIP Handbook.

The Federal Emergency Management Agency (FEMA) has a lot of terms and conditions when it comes to flood insurance. This also covers your coverages and aims to help you understand how flooding and flood insurance works.

Everything You Need to Know about FEMA's Acknowledgment Form

So these are the things you should expect to receive when you're getting that acknowledgment form from FEMA. Flood insurance can be complicated at times and we want to help you avoid all of this hassle. If you have questions on flood insurance, go to our Flood Learning Center where we try to answer all of your flood insurance questions.

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  • Fill out this form by clicking here.
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We want to help simplify flood insurance for you so that you can find more time in enjoying life's beauty.

So you want to buy a flood insurance policy from the Federal Emergency Management Agency (FEMA). Well, you won't have to worry about how to get a policy directly from FEMA because there is the Write-Your-Own (WYO) Program.

What is NFIP's Write-Your-Own (WYO) Program?

In this article, we talk about everything you need to know about WYO policies and why the Write-Your-Own Policy helps make the process of getting flood insurance coverage from FEMA and the National Flood Insurance Program (NFIP) easier.

Write-Your-Own Policy

When looking at flood insurance options, you'd be remiss to think that the NFIP and Private Flood Insurance are two separate worlds that can never meet.

This is far from the truth as FEMA and the NFIP actually built a cooperative in 1983 as a form of partnership with the private flood insurance industry. This is called the Write-Your-Own (WYO) Program.

This created a system wherein you don't need to bother and go through all the hassle of getting a flood policy from FEMA.

What is NFIP's Write-Your-Own Program?

Generally, the Write-Your-Own (WYO) Program helps you find an alternative way to process your NFIP policy through other insurance companies. At the time of writing, FEMA reports that there are at least 50 participating insurers or carriers.

If you want to see what insurance companies are participating in the WYO program, CLICK HERE to go to FEMA's official list.

What's The Difference?

Now, you might be starting to wonder: what's the difference then?

When it comes to the Write-Your-Own, it basically allows other insurance companies outside of FEMA and the NFIP to provide insurance support for operations and everything needed to write an NFIP policy. This makes it easier and quicker to understand your flood risks, especially with the updated Risk Rating 2.0.

What is NFIP's Write-Your-Own Program?

The insurance companies participating in the WYO are allowed to both process the writing of your flood policy, managing of the documents, and use their resource to help you get your flood insurance easier.

The same also applies when you file a flood claim where you will see the participating company to help you get your flood insurance claim get processed.

It's important to note, however, that policies that are written under the WYO still follow FEMA and NFIP's coverage and rates. This should be your heads up especially considering that all federal flood insurance policies are now officially following the new Risk Rating 2.0 program.

What is NFIP's Write-Your-Own Program?

Generally, this means that you will still see a $250,000 limit for building coverage for residential properties or up to $500,000 max for commercial properties with a $100,000 contents coverage.

Getting a WYO policy also means that floodplain management regulations (i.e. flood insurance rate map) set by the federal government will be strictly in place and participating companies are expected to follow it.

Want To Learn More?

If you want to know more about the benefits and differences between the Write-Your-Own Program and NFIP Direct, listen to our podcast below or read our blog post on Write-Your-Own and NFIP Direct:

 

If you still have questions on flood insurance, click below to go to our Flood Learning Center. You could also contact us so we can discuss your flood insurance needs.

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The Flood Insurance Guru | 2054514294

As the whole country moves out of the winter season, saying goodbye to all that snow might not be quick after all. One of the secrets of this transition from the snow-filled streets to blooming trees is the threat of flooding.

What Snowmelts Mean for Flooding in Ohio

Today, we want to talk about snowmelt, how it impacts flooding, and how flood insurance helps in protecting yourself from snow.

Spring Floods in 2022

Farewell to our cool friends from the month of December (see what we did there?) and hello to a warmer climate. For some this is a breath of fresh air since, let's be honest, the winter season had its fair share of annoyances like slippery pavements and the need to constantly shovel snow for areas that experience a lot of snow like the midwest region.

However, this shift might be presenting a bigger concern for the National Oceanic and Atmospheric Administration (NOAA) as the warmer climate also presents the possibility of drought and spring floods across the West, Midwest, and Southeast.

What Snowmelts Mean for Flooding in Ohio

Why are NOAA and other National Weather Service (NWS) are worrying? We got a lot of moisture from winter, Chris.

This is exactly the case when you start to look into flooding. As we move into the warmest season of the year, Summer, it's important to note that all that ice and snow will start to melt.

When you have oversaturated soil, it only takes a small rainfall to transform these into water.

Lookout! Spring Floods in 2022

NOAA considers a lot of factors other than snowmelt when it comes to what's called the spring flood that we may see in May. These things include drought, the current status of snowpacks, saturation levels, frost depth, and streamflow.

These things separated don't really cause floods, but they are ingredients to the worst cocktail you might experience. However, it's important to note that flood threats don't just pertain to that overflow of water from rivers, lakes, or creeks. We all know by now that even consistent rainfall can create damaging floodwaters.

We've actually seen this happen last year in the state of Colorado. You can read our blog on it by clicking here (Snowstorm in the Centennial State: Impacts of the May Spring Runoff).

What Snowmelts Mean for Flooding in Ohio

Considering that there was very late precipitation in fall and winter, the ground that we have during the first months of Spring would still be too wet to take in more water. Major flood risks are being expected from areas near the Red River, Ohio River, and the James River.

This isn't a problem that's specific to areas covered by snow like Ohio where there can be 2 to 4 inches of snow on average, but also to low-lying areas. Once these areas' respective ground couldn't take any more water, all that water won't stop and actually go to low-lying areas.

What Snowmelts Mean for Flooding in Ohio

 

Once you include drought in the equation, then you're just looking at heavy rain and even small amounts of precipitation to be water hitting cement.

This is why NOAA's recent outlook sees areas like the Ohio Valley to be at above-average levels when it comes to flood risks during the spring. This simply means that Ohio is expected to see more floods and runoff during the blooming season. This is the concern of NOAA due to the melting of ice, snow, as well as precipitation as we move into a warmer climate.

How Flood Insurance Helps

We're going, to be honest, a mere flood policy won't be able to change the flood threat that you're facing in Ohio or control its flood stage. However, just like a role-playing game, flood insurance has all the defense stats you would need to avoid getting snared by the violent spring runoff.

Buy Flood Insurance Now!

Flood insurance actually covers damages from all types of flooding including spring runoff or spring flood. This simply means that regardless of the floodwaters coming from snowpacks melting, storms, or major rivers cresting, you will find peace of mind knowing that you can fight those losses.

What Snowmelts Mean for Flooding in Ohio

A standard flood insurance policy can cover all of the damages due to flooding on both your home or dwelling and everything inside of it. Depending on where you're getting your flood insurance, you might see different coverage amounts.

For example, getting a flood policy from the National Flood Insurance Program (NFIP) will cap your coverage amount for building damages to $250,000 and $100,000 for contents.

The same can't be said for private flood insurance companies. Private flood is known for its quick turnaround time to have a policy take effect on an insured building and more flexible coverage amounts.

Need more help in preparing for spring floods? Click here to read our guide on "How to Prepare For 2022 Spring Runoff Season".

Bloom in Spring

Spring flood is becoming a yearly concern for the United States, so it's best to know why such an important change from winter to spring can impact you. After all, we are talking about our safety.

If you've got questions on spring floods or anything about flood insurance, click below to go to our Flood Learning Center where we answer your flood insurance questions.

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Remember, we have an educational background in flood mitigation which lets us help you understand flooding, flood insurance, and protecting you from all types of flood risks.

The Flood Insurance Guru | 2054514294

 

 

Birmingham — Water is the source of life, right? But for Birmingham, Alabama, water can be a real problem and danger as floodwaters become more dangerous.

Just this month of March, we've already seen substantial flash flooding that inundated streets, establishments, and roads rendering them unusable and unsafe.

This begs the question, why do these floods keep happening in Alabama?

We'll talk about that and more in this blog.

Birmingham Last Week

Many residents across multiple counties in the State of Alabama are being bombarded with heavy rainfall due to severe storms since last Wednesday (March 16th). There were numerous areas of heavy rain and storms on First Alert AccuTrack moving in all sorts of directions. We expected this when we discussed potential flood events last month. However, this is was not at a level anyone can expect to impact Alabama.

Flash flooding immediately occurred after cities get dumped with about 2 to 4 inches of rain. At this point, it shows that it doesn't really need to be the heaviest rains to cause a flooding event in Alabama and in the city of Birmingham.

Source: www.al.com | Elizabeth D. Madison

Yesterday evening (March 22nd), a lot of vehicles in the suburbs of Birmingham were stalled by the flash floods. The drivers faced huge problems when they got caught in a flood causing a lot of cars to simply shut down in the middle of flooded roads.

This is one of the biggest concerns that FOX News' Jonathan Hardison tweeted about last night. Add this to severe storms literally busting the roof off of multiple properties ranging from mobile homes to common residential buildings.

Unfortunately, such weather conditions became very bad that one man, Joseva Lawrence Speed, 60, reportedly drowned in Wednesday's flooding after trying to get into a family members' car, and sadly he got overwhelmed by the flash flood.

So with all these flash floods caused by 1 to 5 inches of rain, you might be wondering, what's causing all these constant floods in Alabama and Birmingham City?

Birmingham Relentlessly Battles Floods

Geographical Reasons

For us to understand why Birmingham keeps on getting flooded, we have to acknowledge that Alabama and the city of Birmingham itself sit on a valley which at least 8,000 acres of land being zoned into a Flood Zone A or AE. This means that whenever there's precipitation, you can't really avoid or prevent that excess rainfall to flow downhill into low-lying areas.

These include multiple creeks such as the Shades and Little Shades creeks. You can also count the Black Warrior and Cahaba River watersheds in the areas that receive all that water from excessive rainfall.

Although there are systems in place like stormwater drainage that helps in redirecting where the floodwater goes to avoid potential damage to properties, Jonathan D. Yates, Birmingham's director of the Department of Public Works, had different findings.

These systems are simply not cut out anymore for what's happening in Birmingham. Yates even said that the stormwater drainage system is not built to handle that big and severe of a storm. So it's not just blockage or blocked drainage that's causing all these floods, it's also the behavior of water itself.

Commercial Flood Insurance Map

Urbanization: Water Hitting Cement

Other than the geographic consideration, you also need to look at progressive urbanization which turns natural soil into hard concrete. There are a lot of building projects which remove our natural protective measures against flooding such as flora like trees, vegetation, and grasses.

You see, in wooden areas, all that rainwater is getting absorbed by the soil; however the same can't be said for cities like Birmingham where rain simply just stays and moves around there.

Just imagine spilling water over your wooden dining table versus the water that's poured on a sponge. It's basically changing all that rainwater into stormwater runoff from higher areas of the state and Birmingham City.

Impacts of Climate Change

Lastly, you also need to consider how climate change has drastically worsened how these usual storms, rainfall amounts, and flooding behaves.

The drastic change from cold weather to a very warm one is only going to cause more precipitation or rain in an area. It's basic evaporation, condensation, and precipitation in Science. 

Extreme heat can also cause droughts which are generally like hitting the water to a hard concrete or cement. Take note, this is natural soil not being able to seep in water due to these severe weather conditions.

How to Best Protect Yourself

A lot of things come into play whenever you start thinking about flood mitigation. You can consider the area and flood zone to determine the overall chances of getting flooded you may have.

This is why we really encourage property owners, from restaurants to residential houses, to create flood protection for their property. This includes installing flood vents that help floodwater pass through your property and not really inundate it that much. You can also prepare sandbagging in order to slow the flow of water on your property.

These are just short-term steps in protecting yourself. The best way is to really get yourself flood insurance. This isn't really something that you can see like flood vents or sandbags, but it's the most efficient way to protect your valuables and property from flood damage.

Flood loss is the biggest concern of people in Birmingham especially with these constant floods happening in the city and the only way to take that off your chest is to be sure that someone's got your back.

Birmingham has a lot of flood insurance options that you can choose from.

You can do it through the federal government with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) which got an update through Risk Rating 2.0.

You can also go through the Private Flood Insurance market which offers multiple and various insurance carriers to help you get coverage for your property.

Getting flood insurance also helps you avoid the worry of not having anything to go back to. This is because regardless of where you get your flood insurance from, you will be covered for the damages on your building as well as everything inside it.

It's hard to say that all this will be over since we can't really predict and dictate how floodwater behaves. We hope that you stay safe out there!

If you have any questions, click below to go to our Flood Learning Center where we try to answer all your flood insurance questions.

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

The Flood Insurance Guru | 2054514294

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.

Alabama is no stranger when it comes to flood. When it comes to the continuous development in the city due to its relative increase with the population as well as non-stop oversaturation of the ground due to consistent heavy rainfall, the city just couldn't get a break from floodwater.

4 Lessons Learned from Birmingham October 2021 Floods

Today, we want to talk about the four lessons we've learned from the Birmingham Alabama floods of October 2021 and how this can help flood recovery moving forward.

Flood Emergency

Rain is always the culprit when it comes to natural disasters like flooding. This is why understanding flood emergency is very crucial when it comes to preventing all unnecessary bad experiences when it comes to flooding.

A flood emergency is any disaster wherein water goes into areas that are usually dry and this doesn't just cover regular floods, but also flash flooding which is something that Alabama was warned about during the October flood. Ready defines floods as a temporary overflow of water onto land that is normally dry. Floods are the most common natural disaster in the United States.

4 Lessons Learned from Birmingham October 2021 Floods

However, sometimes these emergency warnings go on deaf ears as people still drive into pools of water and flooded roads. Unfortunately, this causes a lot of casualties. Reuters reported in one article that at least four people died during the October flooding disaster in Alabama; three of these deaths were found inside two washed-up cars.

Being ahead of these emergency warnings is enough to have awareness of the possible flood risk that the current weather or rainfall can cause the impacted area. On October 7th, 2021, al.com reported that there's an estimated 13-inch rainfall during that week.

We hope that everyone understands by now, not just in Alabama, but across the country how important and essential these warnings are. If you're not driving or maybe planning to stay at home, but it's expected to flood there, being aware of a flood emergency can help you evacuate.

Flooding Can Happen Anywhere

We were able to brush through this in the previous item, but it's important to always remember that flooding can happen anywhere.

We've seen a lot of homeowners get blindsided with the words "Not In a Flood Zone" which is one of the biggest misconceptions we see in flood insurance. The thing is no property is not in a flood zone especially in the United States. Even deserts get flooded after a long time of drought, so what more areas like Alabama experience a lot of rain during the year?

If you want to learn more on this "not in a flood zone" concept, we actually did a blog on it clearing the air. Click here to read this blog and know more about flood zones.

4 Lessons Learned from Birmingham October 2021 Floods

It's a new year and we hope that you too get to accept that you can get flooded at any given moment; be it through collected water from rainfall, runoff from higher areas, or simply being located near a water source.

The thing about flood zones as well is that it doesn't really indicate a wall or border because flood doesn't really start at one zone and stop at a lower-risk flood zone. 

Our team understands that flood loss is something one can ignore. In one blink of an eye, everything can be lost due to the inundation of water. This is why we want to discuss the most important lesson we want everyone to understand.

Flood Insurance

When it comes to time during a flood emergency, most homeowners and business owners don't want to leave their property's premises because they want to make sure they have fewer losses as much as possible. This can easily be avoided with flood insurance.

If you've been following us, you know by now that we really put great importance when it comes to flood insurance. Forget about sales and all that. It's always safety first and most of the time, this safety comes in form of the insurance that you won't even feel the flood losses despite its scale.

You see, flood insurance can really help you avoid doing all the stuff you want to do to lessen the damages and losses you'll incur during a flood emergency. A standard flood insurance policy has enough coverage for both building and contents that homeowners and business owners don't really need to worry about "saving as much as one can".

4 Lessons Learned from Birmingham October 2021 Floods

Federal Flood Insurance

On the federal side with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP), coverages on building maxes at $250,000 for residential buildings and can go up to $500,00 in commercial buildings. Both property types also get a max of $100,000 when it comes to contents coverage or every personal item inside the insured building.

This is outside of other coverages like the disaster assistance from a presidential approved declaration, the Increased Cost of Compliance (ICC) which is about $30,000 in coverages for flood mitigation, and when it the Community Rating System (CRS) Score which can create discounts of up to 45% on flood premiums with FEMA and the NFIP.

Private Flood Insurance

On the other hand, if this doesn't really cover your needs for flood insurance, Alabama also has a lot of private flood insurance carriers that we are also connected to. These private insurance companies can go beyond the building and contents coverage limits with FEMA and the NFIP. That means that a single flood insurance policy can cover you for more than $250,000 in building damages and more than $100,000 in contents.

These coverages from a flood policy can easily save you the trouble of worrying about what gets damaged and focus on keeping yourself safe from the debris and hurt from all that floodwater. But how are flood insurance and its claims different from home insurance claims?

You can read our blog comparing these two sides of flood insurance from our NFIP 2.0 vs Private Flood article.

Flood Claims vs Home Insurance Claims

When it comes to insurance claims, as a homeowner or business owner, you should be aware of when your standard homeowner's insurance applies and when flood insurance kicks in.

When it comes to flood insurance claims, you can't really get the coverage written on your policy if the surveyor detected that the damages to your home are due to water damage or a water backup. This means that flood claims won't pay out if your house was damaged from the inside and not due to getting inundated by surface water.

You can remember this through the "Number 2 Rule" wherein FEMA and most private companies will only consider water as a flood if at least 2 acres of usually dry land was covered by water or when at least 2 property gets inundated with water. Obviously, one of the properties or acres of land must be yours in order for your flood claim to payout.

4 Lessons Learned from Birmingham October 2021 Floods

You won't get your flood claim and insurance coverages in flood insurance if this rule doesn't apply to your situation. Another thing to keep in mind about flood insurance claims is that it usually covers and expects that the property owner also set up necessary flood mitigation efforts to prevent the same damage in the future. This is why the ICC exists for federal flood insurance as a means to avoid the same losses from future disasters like floods.

Equally, you can't use flood claims to cover damages due to fire, earthquakes, or any other natural disasters. It simply is strictly for flood disasters only; regardless of whether it is a minor flooding, flash flooding, or major flooding events in Alabama.

It's a bit difficult to write about this especially since there were a lot of people who got their homes damaged, lost their loved ones, and even just found themselves at a loss after all the water subsided.

The thing about lessons is we need to learn from them in order for them to be valuable and we hope that this refresher will also help you understand how we can avoid getting blindsided by an event like this again. So, if you have any questions on flood insurance, how to best protect your property from floods, or anything related, click the links below.

You can click here to access our Flood Learning Center where we try to answer most of your flood insurance questions:

Flood Insurance Guru | Service | Knowledge Base

Or click here to contact us and we can talk about your flood concerns for the Alabama flood of October 2021.

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, and protecting your property long-term.

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In today's FEMA Cancellation Reason blog, we want to talk about payments and how they can lead to your flood insurance policy actually getting canceled. Sheesh!

FEMA Cancellation Reasons: Category #6 - Invalid Payment and Fraud

We've covered much ground when it comes to the changes that are looking to update FEMA's structure when it comes to policy cancellations. We've talked about the first five categories which are canceling your insurance due to no insurable interestsestablishing common expiration datesduplicate coverage, being ineligible for flood insurance coverage,  and policy is no longer required by the lender. These are Categories #1 through Category #5 respectively.

Let's talk about when your payment encounters a wall and also when the payment is fraud involved.

Category #6 - Invalid Payment and Fraud

When it comes to the legacy program of the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) or simply NFIP 1.0, there's a separation between the cancellation of a policy due to invalid payment and fraud. You can actually see this on how they're numbered — exactly 17 numbers apart.

FEMA Cancellation Reasons: Category #6 - Invalid Payment and Fraud

Reason Code #06 — When it comes to invalid payments, this is mostly concerned with payments for your flood insurance policy not meeting the expected amount. Maybe there's been confusion between you and your agent that you sent FEMA a lesser amount of money than expected.

Sometimes, when renewing a policy, you might think that you will have the same amount as before, so you had the payment sent out when it's actually less than your updated premium. This can also happen, theoretically speaking, when your lender didn't provide them enough payment to cover all the insurance costs.

The thing about flood insurance payments (or any insurance payment to be exact) is that they have to match the expected amount for the total premiums. Yes, down to the taxes and cents, you're expected to provide your insurer with the proper amount of payment to proceed with your policy.

When this happens, your policy will be canceled by the insurer or FEMA due to Reason Code #06.

FEMA Cancellation Reasons: Category #6 - Invalid Payment and Fraud

Reason Code #23 — Now this is something that you should really avoid with all your power. However, here's an example in the name of knowledge, there are some situations where the insured will commit fraud by faking their payment for their FEMA policy.

We really don't need to expand on this since fraud is fraud even when it comes to flood insurance payments. Just keep in mind that when FEMA detected fraud on the flood policy's payment, there will be no refund and the policy will be canceled.

What's Changing?

When it comes to Risk Rating 2.0 or NFIP 2.0, these cancellation details will be updated. We'll no longer see Reason Codes since they will be changed to Cancellation Categories

Any cancellation of a policy due to invalid payment and/or fraud, which are Reason Codes #6 and #23 respectively, will be combined under Category #5.

It's important to note that flood insurance payment is a crucial factor in your purchase. Having a delayed payment might cause your effectivity date to move and your coverage to lapse. Having an incorrect payment will cause your policy to be canceled. Both of which can have a big impact especially now that we can't really predict when floods can happen.

FEMA Cancellation Reasons: Category #6 - Invalid Payment and Fraud

If you want to get help understanding payment terms on flood insurance, not only with FEMA and the NFIP but also with the private insurance carriers, reach out to us by clicking the links below.

If you want to know how flood insurance work, and how your FEMA policy can be canceled, where to buy flood insurance, understand your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

Flood Insurance Guru | Service | Knowledge Base

You can also click my picture below to call us for your flood insurance concerns.

a person wearing a hat

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

We've talked about the updates for canceling flood insurance policies from the federal side of flood insurance.
FEMA Cancellation Reasons: Category #5 - No Longer Required Insurance

We've covered things like no insurable interests, establishing common expiration dates, duplicate coverage, and being ineligible for flood insurance coverage which are Categories #1, #2, #3, and #4 respectively.

Today, we'll keep the train going as we want to discuss Federal Emergency Management Agency (FEMA) Cancellation Reason and what category covers it when your mortgage lender no longer requires you to carry flood insurance for your property.

Flood Zones & Why They Matter

Before we dive into the cancellation details in both the legacy and updated program, we want to review first the conditions where your mortgage lender will require you to get flood insurance for the property.

If you've been following us, you know that we really highlight flood zones when it comes to our content. Other than this being a threat to your safety as flood zones determine which areas are more prone to floods, it's also a headache when it comes to costs.

Depending on what zone your property sits on, your mortgage lender can actually require or not require you to carry flood insurance for the property.

One of the situations or conditions where this can happen is when your property sits on a high-risk flood zone like Flood Zone A, Flood Zone AE, or any flood zone that starts with an A honestly. This also includes the coastal Flood Zone V.

This is because both the federal government (i.e. FEMA) and your bank will make sure that the property has enough safeguard in place to protect your home from flood damage and flood loss. Another reason where your mortgage will require you to carry flood insurance is sometimes solely based on the lender's discretion.

The flood zone of your property will solely be based on the current flood insurance rate map (FIRM) or flood maps that your community has. The thing about FIRMs or flood maps is that properties will get moved into or outside of these high-risk zones or the SFHA. Whenever there are new flood maps, you can expect that properties will also be changed from a low-risk flood zone to a special flood hazard area (SFHA).

Category #5 - Lender No Longer Requires Insurance

Now, let's say you're in the SFHA which means that you're being required by your lender to have flood insurance on the property, and then FEMA and the NFIP release a new FIRM for your area which causes your property to be moved to a flood zone X. As you can remember, flood zone X is one of the most common low-risk flood zones and doesn't really require properties to have flood insurance.

This means that you can cancel your flood insurance for that property. Although we highly discourage canceling flood insurance when you're in a low-risk zone because you can still get flooded at any given time, you can still continue without flood insurance.

In the legacy program, you can have your policy be canceled through Cancellation Reason Code #8 to indicate that your lender no longer requires flood insurance on your home.

What's Changing?

As you know by now, FEMA's changing the cancellation details, and for Reason Code #8 or when a policy is no longer required by the lender will be classified as Category #5. This means that Reason Code #8 will no longer be available to be used as a cancellation reason because it's been changed to Category #5.

Here's a list of the conditions that FEMA wrote when it comes to the Category #5 cancellation reason:

  1. Your lender required you to get flood insurance for a loan closing, but later on, discovers that the property doesn't reside in the SFHA.
  2. There are no paid or pending claims.
  3. Your insurer has to inform you that you can keep the policy despite not being required instead of canceling it.

This can really be a good thing when it comes to finances because you get to eliminate flood insurance costs from your budget however, as we said before, it's not really something we encourage since flood insurance protects you from losses even if you're not in a high-risk flood zone.

Equally, it's important to note that FEMA themselves has shown data that at least 25% of flood insurance claims come from low-risk flood zones. In layman's terms, low-risk flood zones get flooded too.

If you want to get help understanding when you'll be required to carry flood insurance, not only with FEMA and the NFIP, but also with the private insurance carriers, reach out to us, how flood insurance work, and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

Flood Insurance Guru | Service | Knowledge Base

You can also click my picture below to call us for your flood insurance concerns.

a person wearing a hat

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

We have talked about canceling your FEMA flood policy due to Category #1, Category #2, and Category #3 which are No Insurable Interest, Establish Common Expiration Date, and Duplicate Coverage respectively.

FEMA Cancellation Reasons: Category #4 - Not Eligible for Coverage

Today, we want to talk about the dreaded scenario when buying flood insurance and also may fall into the cancellation of your flood insurance policy with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP): Not Eligible for Coverage.

Let's talk about this and what category number it falls into with the updated federal flood insurance cancellation reasons.

Category #4 - Not Eligible for Coverage

When it comes to flood insurance, homeowners and business owners alike are expected to follow a standard when it comes to insuring their property. With regards to the federal flood insurance, the SFIP always takes effect on properties looking to get flood insurance from FEMA and the NFIP.

The Standard Flood Insurance Policy (SFIP) contains a list of reasons why you may not be eligible for coverage against floods from FEMA and the NFIP. Generally, you can expect that if your property doesn't meet FEMA's and the floodplain management's regulation, you won't be able to get coverage for that property (i.e. mobile homes).

Now, when it comes to policy cancellation, either the insured or insurer can cancel the property because it doesn't follow necessary expectations to meet the eligibility for flood insurance coverage.

With FEMA and the previous version of the NFIP, this used to be written in Reason Codes #06, #27, and #29. Let's talk about the conditions that will cancel your policy per Reason Code.

FEMA Cancellation Reasons: Category #4 - Not Eligible for Coverage

Cancellation Reason Code #06 simply entails that a property will not eligible if it either (1) doesn't meet the structure code for to meet the definition of a "building", (2) the contents aren't located in the building/property, (3) the property is not in a NFIP participating community, (4) the property is located in the Coastal Barrier Resources System (CBRS), and (5) the building is declared a 1316* prior to the flood insurance application.

*1316 declared building is any property that does not meet floodplain management regulations.

What's Changing?

When it comes to the cancellation update and changes, this Reason Codes will be removed and will be categorized under FEMA Cancellation Category #4.

This means that if your property, by any chance, can't receive flood insurance coverage, you or your insurance agent will have to cancel the policy under Category #4.

You see, when it comes to flood insurance, it's a good thing that a lot of people already applies for a flood policy ahead of time to maximize the coverage time. However, we see a lot of homeowner and mostly business owners who will find out that they're not eligible.

In order to avoid having your resources go to waste, we really encourage that you communicate with your insurance agent first before getting a flood insurance for your home or business. A great insurance agent will help you check if you're eligible for FEMA flood insurance before they even help you apply for one.

FEMA Cancellation Reasons: Category #4 - Not Eligible for Coverage

Not being eligible for flood insurance, regardless if it's from the federal or private market, can really be a disappointing experience.

If you want to get help understanding  your eligibility for flood insurance, not only with FEMA and the NFIP, but also with the private insurance carriers, reach out to us, how flood insurance work and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

Flood Insurance Guru | Service | Knowledge Base

You can also click my picture below to call us for your flood insurance concerns.

a person wearing a hat

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.

The Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) are stepping on the gas to upgrade their services when it comes to flood insurance.

FEMA Cancellation Reasons: Category #3 - Duplicate Coverage

In today's blog, we want to address one of the most important changes coming with the Risk Rating 2.0 when it comes to the cancellation federal side of flood insurance.

What happens when your coverage is duplicated between two policies? How will it be canceled now that's NFIP switched to Risk Rating 2.0?

Category #3 - Duplicate Coverage

When it comes to purchasing flood insurance, it's not impossible that a homeowner will get duplicate policies. After all, having an option is better than none at all. However, this type of situation creates a possible chance that the flood policy of the insured will be duplicated.

This is why FEMA and the NFIP allowed policyholders to have a flood policy canceled if there's an unintentional or, basically, accidental duplication of your flood insurance.

In the previous NFIP Legacy Program, this is known as either Cancellation Reason Code #04, #10, or #26. Let's talk about how these three are different from one another.

FEMA Cancellation Reasons: Category #3 - Duplicate Coverage

Reason Code #04 indicates that a policy may be canceled if there's a duplicate in coverage. This means that you might be registered under two different flood insurance policies for the same name, address, coverage amount for the building and its contents.

When it comes to this Reason Code, one of your duplicated policies will be canceled in order to either (1) establish a common expiration date, (2) the dwelling/building policy coverage due to RCBAP (more on this later), (3) there's a force-placed policy from the mortgage when the insured/borrower already bought a flood policy, (4) a policy of earlier date already expired, or (5) a Group Flood Insurance Policy (GFIP) needs to be canceled to move into a standard-rate policy.

Reason Code #10 mostly concerns renters. This Reason Code's cancellation indicates that the policy needs to be canceled due to either the policy with only building coverage is being replaced by the Residential Condominium Building Association Policy (RCBAP), or the unit owner or RCBAP building limits are more than what FEMA coverages offer.

Reason Code#26 is for those who bought a policy from private flood insurance carriers and didn't want to push through with their NFIP policy's purchase or renewal.

The NFIP policy will be canceled depending on your discretion, so they won't really cancel it for you without your confirmation. This is very helpful to keep in mind especially for FEMA policyholders who are switching to private carriers for their flood insurance needs.

FEMA Cancellation Reasons: Category #3 - Duplicate Coverage

What's Changing?

Generally, the details and conditions of the three aforementioned Reason Codes still apply to the new Risk Rating 2.0 program. However, in order to avoid confusion, FEMA and the NFIP decided to combine Reason Codes #04, #10, and #26 into one Category.

FEMA Cancellation Category #3 is basically what you'll need whenever you need to cancel a federal flood insurance policy because it's a duplicate. This change can really be helpful for homeowners and business owners alike who won't have to keep on reviewing the FEMA handbook to know what's the best Reason Code for their situation.

This is also a great tool for those looking to move into the private insurance carriers to get a more fitting policy for their coverage needs.

These changes can be confusing, so if you need help understanding how flood insurance work and how your FEMA policy can be canceled, where to buy flood insurance, understanding your risk of flooding, or anything related to floods, click below to access our Flood Learning Center.

Flood Insurance Guru | Service | Knowledge Base

You can also click my picture below to call us for your flood insurance concerns.

a person wearing a hat

Remember, we have an educational background in flood mitigation which lets us help you understand your flood insurance, how it can be managed, flood risks, and mitigating your property to preserve its value long-term.