2020 has been a year that no one will ever forget. There are three things we want to look at in 2020 and how they could impact the future of coastal private flood insurance.

  1. Covid
  2. Social Injustice
  3. Hurricanes

 

                                                           Covid

When Covid hit in March of 2020 it caused many businesses to come to a crashing halt.

The hospitality industry has basically been non existent and you couldn't pay someone to get on a cruise ship. Airlines are barely surviving. As this happened businesses turned to their insurance companies for coverage.

However many were surprised to find out that most insurance policies don 't cover this type of disaster. Government put pressure on insurance companies to provide coverage. However its difficult to provide insurance coverage when a premium was not charged for a risk.

As these businesses started to close they started to cancel their policies. This started to impact insurance companies as businesses were no longer needing insurance for a closed business. While this was a minimum impact on the bottom line when you add the next two things it creates a major problem.

 

                                 Social Injustice

2020 has seen the rise of social injustice and unrest across many parts of the country. Portland Oregon has seen many businesses burned and even Atlanta Georgia saw businesses damaged after a man was killed in an altercation with police. 2020 was problem the first time in 50 years that you have seen moratoriums put in place by insurance companies for selling business insurance.

At one point Target had to close its Minnesota stores because of looting.

 

                                                Hurricane Season

Now onto the third maybe the biggest thing to impact insurance companies in 2020. The 2020 hurricane season was predicted to be busy but no one predicted it to be this busy. In fact NOAA has had to make several adjustments to their hurricane predictions for 2020.

As we write this blog at the end of October in 2020 we have had 27 named storms, 11 hurricanes have made landfall in the U.S. and 5 hurricanes have made landfall in Louisiana.

This ties the record for most landfalls in a year within one state. Florida set the same record in 2005.

Hurricane Sally, Marco, and Delta have all created major damage in the gulf states. In fact Delta and Sally made landfall only 15 miles a part.

Like most people in 2020 insurance companies are eating through their reserves fairly quickly and they are discovering that many of their risk models were off.

So what does this mean for coastal states like Florida, Alabama, Mississippi, Louisiana, and Texas.

In Mississippi we are already seeing some private carriers halt business completely and we have seen this in Louisiana for a few years. Texas has also had this issue since Harvey.

We could see this pattern start to work its way towards Florida and Alabama.

Does this mean flood insurance will not be available?

No

The National Flood Insurance Program is available for properties where communities participate. It just means that the private flood insurance options could be limited for a while.

This will be a crucial time for you to work with an insurance agency that can defend your risk?

What does this mean?

This means being able to show how a risk may have changed because of mitigation efforts even if it has flooded. We see customers rejected everyday because someone did not defend their property correctly.

If you have questions about what your flood insurance are in these areas then click here. You can also check out our

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

 

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It's the question that gets asked probably a hundred times a week. Insurance agents, property owners, and even banks want to know the answer.

Everyday we see FHA loans fall apart because of flood insurance. Many times flood insurance through the National Flood Insurance Program can be higher. Then you might have to pay the cost of an elevation certificate.

In 2019 FDIC made a major move in the industry when it started to allow private flood insurance.

People assumed this meant FHA would start accepting private flood insurance. However, because FHA insures loans they have different guidelines they do not accept private flood insurance. As of July 2022 FHA still only allows flood insurance through the National Flood Insurance Program, but hopefully, that will be changing soon.

On November 10, 2020 FHA made an announcement they were looking at accepting private flood insurance. They opened up a 60 day comment period for people to leave comments on this possible action.

So what happens next and what will be the impacts?

 

What's Next

After this 60-day comment period FHA will look at the comments and probably make a decision by the 2nd quarter of 2021. If they decide to approve it then they would probably delay it going into effect by 6 months. This is what FDIC in 2019.

So what could the impacts be?

 

The Impact

Well if you currently have an FHA loan then these could possibly cause a major decrease in your mortgage payment. You might see a 40% rate decrease in the private market.

 

However if this is passed don't go and try to jump to the private market right away.

FEMA has strict guidelines for cancellation. Unless you are refinancing your house you may not qualify until your policy is up for renewal.

 

In 2019 we saw a lot of people lose money because of FEMA cancellation rules. Many times private carriers require payment up front and charge minimum earned premiums.

This means you might be out 25% of the money you paid for a private policy because FEMA won't let you cancel.

 

We will continue to monitor this situation and continue to educate the public as this process moves forward. If you have questions about your flood insurance options then click here.

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Check out our YouTube channel and Podcast.

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

 

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Flood zone AE also referred to as the 100 year flood zone has the highest premiums other than coastal areas. These are generally because most of the structures have a negative base flood elevation. So what determines the premiums of these zones?

Well there are a few things that have a major impact on flood premiums in these zones. The age of the structure, the foundation type, flood loss history, and the elevation of the home.

Let's start with the age of the structure depending on when the house was built it will have a different rating model through FEMA. Its based on the first flood map for structure which generally occurred after 1978. If it was before the first flood map its called a PreFirm structure and if its after the first flood map its called a PostFirm structure. One of the big differences between these two types of structures is called grandfathering where you can keep the property in a preferred flood zone that no longer exists. This is allowed on PostFirm structures but not PreFirm structures.

The next thing that has a major impact on flood insurances rates in flood zone AE is the foundation type. Let's start with crawlspaces above grade compared to subgrade. Above grade is a crawlspace that sits above ground and subgrade is going to be crawlspace that sits partially below ground. The big difference here is subgrade generally will sit a certain level below the base flood elevation which increase the premium. While above grade sits above ground it could still be below the base flood elevation. The difference is things like flood vents can significantly lower the premiums with above grade crawlspaces.
The next type of foundation that will have a major impact on premiums are basements. As you can imagine basements can sit a good distance below the lowest adjacent grade creating a significant negative elevation. This can have a big difference on the rate so its very important to understand this when owning a house and purchasing a house. Also just because a basement is below grade does not mean that it is below the base flood elevation. Now that we have talked about foundations lets talk about how the elevation of the home in a flood zone Ae can impact the rate.The only real way to know this is to have a survey or elevation certificate completed. Now that we have discussed how the elevations of a home can have a major impact on flood insurance rates as you can see from the different foundation types.

Lets talk about positive elevations first and how they can have a big impact. The further your home is above the base flood elevation the better the rate is going to be. If all the elevations of your home are above the base flood elevation your home might even qualify for a letter of map amendment. This means that your property might be removed from the high risk flood zone and placed in a low risk flood zones causing a big improvement to property values. Now lets talk about the impact of negative elevations. As mentioned above basements can cause a home to have an extreme negative elevation. The higher the negative elevation a home has the higher probability of a flood occurring. This can create a double edged sword because the NFIP rates can be through the roof sometimes exceeding $10,000 a year for non coastal properties. However the other problem is the higher the negative elevation the less likely that a private insurance carrier will offer coverage on a property. So these are some things to think about when buying a home with a basement or building a home. we have discussed the impact foundation types can have on a structure lets talk about flood loss history.

Flood losses can have a major impact on a property. It could even stop a property from selling if severe enough. Generally when one flood loss occurs you would lose the preferred rating with the NFIP if you had one. Having a flood loss can also eliminate most of the private flood insurance options as most will not insure a property that has had a loss. However when the second loss and paid claim occur is when disaster can strike. This can turn a property into a severity loss property which has to follow certain mitigation guidelines in order to get insurance through the National Flood Insurance Program and private flood insurance is not available on these type of properties. This is why you should really review things closely before filing a flood insurance claim.

Have questions about flood insurance? Click the link below or visit The Flood Insurance Guru Find My Flood Risk & Flood Rate

Shelby County's own University of Montevallo (UM) is celebrating its 125th anniversary and this is really something worth noting. However, during this time a concern that doesn't look like affecting flood insurance surfaced; local restaurants and the general population of Shelby County are experiencing supply chain issues.

The Impacts of Supply Chain On Flood Claims in Shelby County, Alabama

Today, we want to talk about what this could mean for flood insurance, its coverages, and what to expect as we celebrate the 125th anniversary of UM.

Supply Chain Issues

Local restaurants in the southern parts of Birmingham are having a rough start to the year as supply chain issues resurface. This is causing a lot of problems not just for food supplies, but even necessary utensils and such. From containers to equipment, business owners are having trouble handling the potential economic impact of the issues with supplies.

This issue is just a few weeks after President Joe Biden implemented a presidential declaration to help homeowners across Jefferson County, Mobile County, and Shelby County when it comes to recovering from the October 2021 flooding.

The Impacts of Supply Chain On Flood Claims in Shelby County, Alabama

A local business owner, Naseem Ajlouny, shared with Shelby County Reporter how he's struggling with the supply chain issues. He quoted to have "spent around 30% of work now trying to source product". Moreover, there are also concerns with food supplies through crops such as the availability of corn on the cob and other protein products.

This is creating an increase in costs for menus across the county just to make ends meet. Worst case scenario, the item just has to be removed from the menu.

So what does this mean for flood insurance?

Supply Chain & Coverages

Now, when it comes to the concern of the supply chain, it's important to keep in mind that this doesn't just impact how businesses run. This also means that there may be unwanted impacts to flood insurance.

Let's all remind ourselves that Alabama, especially Shelby County, can be very prone to floods. There are a lot of flood hazards in the area which only contributes to the high-risk flood zones that the county is in when it comes to flood insurance rate maps (FIRM). So, this isn't really just a concern for business owners, but it can also impact homeowners.

You see, when it comes to flood insurance coverages, those replacement costs for recovering and rebuilding the building still need to come from sourcing out materials — the same goes for content coverages or the personal items included with the insured building.

If business owners are having trouble getting materials outside of flood insurance coverages and to keep their businesses afloat, what more when water starts overflowing from the floodplain?

This type of issue can cause a limited amount of coverage when it comes to additional living expenses from your flood insurance claim. This means that you won't really get an increase in premiums or payment, but you can expect to face higher costs when it comes to repairing the building.

The Impacts of Supply Chain On Flood Claims in Shelby County, Alabama

When flood insurance covers the repairs or recovery of an insured building, the market can still have an impact on the costs of materials like wood, bricks, metal, and things like that. Since the county is experiencing some challenges with importing these things, it's safe to expect that there will be higher costs on the materials.

This could also mean that if you have that $250,000 standard coverage for your $200,000 home, it will easily be maxed out when you file a flood claim when the reparation begins.

Even if we say that you will get 100% coverage on the repair of your insured building, there will be no room for flood mitigation measures since the building coverage or replacement cost is already maxed out.

The Impacts of Supply Chain On Flood Claims in Shelby County, Alabama

This can be very concerning especially since we're moving out of the winter season very soon and that also means that Alabama will face runoff from all directions. We've seen this happen before and it's not impossible to happen again. Despite the clearer skies in North Alabama, it's important to mention that Cullman County in the north-central areas of the state, faced 2 to 3 inches of rain in September before the October flooding.

Are you prepared to face possible flooding in the next few weeks?

If you have any questions on supply chains and flood insurance, how to review your insurance coverages, where to get flood insurance or anything at all, you can click 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 your flood risks, flood insurance, and mitigating the value of your property long-term. 

When it comes to insurance policies, these things involve a lot of commitment and hard-earned cash from everyone, so people are starting to become more careful with it.

Today, we want to talk about the three reasons why people across the United States don't buy flood insurance and understand why you should avoid this type of thinking.

Not in a Flood Zone

The first reason we always hear that comes from not just property owners, but also mortgage lenders and insurance agents. This is a common misconception in the flood insurance industry which we've covered in our previous blog.

When a mortgage company tells you that you're not in a flood zone, this doesn't really mean that you won't get flooded instead it simply means that your property is no longer in a high-risk flood area or high-risk flood zone like a flood zone A.

A lot of people think that they're not in a flood zone, so they don't need flood insurance however this isn't really the case. When your mortgage company or insurance agent tells you that you're not in a flood zone hence you don't need flood insurance, this doesn't mean that you're not going to be flooded.

It's important to note that when you're not required to carry flood insurance is due to the fact that maybe your house sits on or was moved into a low-risk area. Now, when it comes to the time that a flood event happens, these low-risk flood zones have less likelihood to get properties inundated with water.

We've seen this happen with New York where a lot of people couldn't find coverage for the flood damage that was brought by Hurricane Ida. The thinking that only high-risk areas need to have flood insurance is a big hoax in the industry since there's individual flood risk for each property.

This is why a flood map or flood insurance rate map would show you in a flood zone regardless. This requirements of when to get flood insurance based purely on flood zones are creating a bigger disaster than the water itself.

This isn't an exception from the damages, however. This brings us to the second reason.

Flood Risks

A lot of low-risk areas get inundated with water even after a storm or heavy rainfalls in other zones because there's a chance that the excess flood water will flow into these low-lying communities. You also have to consider that certain development disrupts the natural pathways of water and causes only 10% of the water to go into the ground.

This second reason will be coming from people who know that they're in a low-risk flood zone, but underestimates the damages that flooding can bring to their doors. It's important to note that these flood zones determine how much flood that your property might get. This doesn't indicate how severe the impact may be as flood damage varies depending on the circumstances.

3 Reasons Why People Don't Buy Flood Insurance

A rapid flash flood can cause more damages than standing water that's inundated your home. This also means that it's very much possible to have the same flood impact regardless if you're in low-risk or high-risk areas.

According to Wharton School as cited by Zurich, in New York, eighty percent (80%) of residential property didn't have flood insurance and ninety percent (90%)  of business or commercial property also didn't have any sort of protection from the flooding during Hurricane Sandy. This shows how much property and business owners disregard the opportunity to get protected through a flood insurance policy.

Homeowner's Insurance Policy

Lastly, we have another common misconception when it comes to insurance, flood coverage, and more. When it comes to this part, it's important to understand that your homeowner's policy doesn't really cover any damages from flooding. A lot of people think that flood coverage can be attached to your homeowner's insurance once you secure a policy for the structures in your home.

Flood insurance is a separate entity when it comes to insurance coverage. Yes, this will still get you coverages for the damages on the insured building that's been inundated with water. So let's take a few steps back and understand what's covered by your homeowner's insurance and your flood policy.

Now, when it comes to damages any type of water damage that impacts your home will be covered in the policy jacket of your homeowner's policy. This is because when it comes to floods, there's what we call the "Number Two Rule" set by the federal government through the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

This rule determines if you need to file a claim to your homeowner's insurance company or through flood insurance, be it FEMA or the private flood insurance market. According to the rule, it will only be considered as flood damage and will be covered by your flood policy if it qualifies for either one of the two conditions. A flood will only be considered as a flood if:

  1. At least two (2) acres have been inundated with water - This means that if standing water starts to impact a community, it will only be considered as a flood if there are at least two acres of land are impacted and, basically, is underwater due to excess water from rain, storm, runoff, melting ice/snow, or any type of natural disaster.

  2. At least two (2) properties have been inundated with water - This means that any type of two properties; house, business, or park, for example, have to be inundated or impacted by floodwater that comes due to the aforementioned reasons. In order to qualify for a flood insurance claim, one of these two properties must be your insurance building.

This can be a very frustrating experience if you don't know when you can file a flood claim for the damages. There's also a chance that you were flooded and reach out to your homeowner's insurance provider only to be rejected and left with nothing.

At the end of the day, it's always best to find security through a flood policy. This is the only way back up when all that water starts to destroy your home, the buildings you have and all their contents, and important personal property.

If you have any questions about flood risks, how to get flood insurance through FEMA, NFIP, or the private market, or anything about floods, reach out to us by clicking below.

Get Your Flood Risk Score Here!

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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 mitigating your property long-term.

Flood insurance is slowly but surely transforming itself as we veer closer to the new Risk Rating 2.0 program with the National Flood Insurance Program (NFIP) and the Federal Emergency Management Agency (FEMA).

What Role Does Time Play in Flood Insurance?

If you've been with us, you know that we're talking a lot about flood maps or flood insurance rate maps (FIRM), flood zones, flood claims, and flood insurance premiums. Today, we want to discuss a very crucial aspect of flood insurance that may not seem impactful, but can either make or break you. We want to answer, what role does time play when it comes to flood insurance?

Wait Period

FEMA and NFIP

There's a lot of things that come into play when it comes to flood insurance. One of the most important things to know is the waiting period. Depending on where you're getting flood insurance, this can really have a huge difference especially if you're concerned about when your policy is going to take effect.

If you were to get a flood policy from the National Flood Insurance Program (NFIP) as preparation for protecting your property as a homeowner when it comes to natural disasters that cause flooding — like what's happening right now with Hurricane Ida — you will have to really strategize on when you should buy flood insurance.

What Role Does Time Play in Flood Insurance?

We strongly encourage that if you're buying from the National Flood Insurance Program (NFIP), do it as soon as you can since they have a 30-day waiting period for all policies to take effect. This will stay the same even with the Risk Rating 2.0 update for the NFIP. If you were to buy a policy on September 1st, all the building coverage and content coverage won't kick in until October 1st.

We've said this many times; don't wait for the water to come rushing to your door because you're not in a flood zone. It's important to have a look back on events just this year with Baton Rouge in Louisiana, Monnett in Missouri, Nashville in Tennesse, and more recently with multiple counties in Virginia. These were times where heavy rain caused a lot of problems for residents due to flooding.

If you want to best prepare for your flood insurance policy with the NFIP, you'd want to do it as soon as now because there's no telling when floodwater can come to your own porch.

Private Flood Insurance

When it comes to private flood insurance, there will be significantly shorter waiting periods for your policy to start to kick in. Most private flood insurer can get you a policy as soon as all the purchase process itself has been completed and will only take 7 - 10 days for the policy and its flood coverage itself to kick in. This is because any private insurance company you pick is no longer under the federal government, so you won't really have to go through all those red tapes.

We recently helped a customer get their policy renewed with a private insurance company with only a 7-day wait period without any lapse on their coverage. Simply put, they are able at all times with this renewal of the policy.

What Role Does Time Play in Flood Insurance?

As you can see, this shorter waiting period can give anyone peace of mind when it comes to preparing for flood damage. This immediate turnaround time also helps any property owner across the country understand their risk of flooding ahead of time.

Understanding your flood risk is a key step in preparing for dangerous flash floods, be it through a flood map or your flood risk score.

Claims

FEMA and NFIP

Another thing that you want to look into how time plays with flood insurance is the flood loss claims themselves. When it comes to the federal program, there will be a 20-year look back on the flood insurance claim on the property. This 20-year look back can change how the rates for flood insurance will go. This is what's called a flood claim variable. We've already covered the nooks and crannies of this through our previous blog.

There's also the 10-year rolling period for flood claims which determines whether or not your property will be included in the severe repetitive lost property list. Generally, this happens once you file more than one claim in a 10-year rolling period with FEMA.

What Role Does Time Play in Flood Insurance?

Private Flood Insurance

When it comes to private flood insurance, time is still a big player since it's most likely that an insurance carrier will refuse to give you a flood insurance policy because you had a claim from 5 years ago. This is one of the things you should look out for when it comes to private flood insurance. These carriers can pick and choose who to provide insurance to, when to provide it, and when they will pull back. 

Time and Time Again

These are just some roles that time plays when it comes to flood insurance. However, one of the most important things that time plays into when it comes to flood insurance or flooding, in general, is when you hear people say: I wish I had more time preparing for this, or I wish I knew that homeowners insurance policies don't cover flood damage at an earlier time in my life.

Let's all keep in mind that water doesn't know time. One moment it's just rain then a few seconds you're already knee-deep in floodwater and your property's already wrecked by water. So if you have questions on flood insurance timelines, when and how to buy flood insurance, or what your flood risk score is, click below to reach us.

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Remember, we have an educational background in flood mitigation which lets us help you understand your flood risks, flood insurance, and mitigating your property for a much longer time.

When it comes to flood insurance, once you're exposed to it you also start to encounter one of the most prevalent terms in the industry: flood zone.

Many property owners would say that they're not in a flood zone because either their real estate agent, mortgage, or insurance agent would tell them so, but are you really not in a flood zone?

The Flood Insurance Guru | Not in a Flood Zone: What Does that Mean?

Flood Zone

First, let's go over what a flood zone is. The Federal Emergency Management Agency (FEMA) who manages the National Flood Insurance Program (NFIP) or the federal flood insurance would define flood zones as an area with a specific type of flood risk according to geographical and historical data.

It's important to note that, generally, all flood insurance companies depend on FEMA's words when it comes to flood insurance. The data is dependent on floodplain devolvement in that area, floodplain status, proximity to a body of water like creeks, lakes, or rivers, history of flooding, the chance of flooding, and things like that to create an output that what we call a flood map or Flood Insurance Rate Map (FIRM).

A flood map of an area or community can show multiple flood zones since it depends on the flood risks that this area faces. These zones can range from low-risk flood zones to high-risk flood zones or special flood hazard areas (SFHA).

Now, what does it mean when people start saying that they're not in a flood zone?

 

Not in a Flood Zone?

When it comes to flood zones and flood insurance rate map (FIRM), there's no such thing as not being in a flood zone. This is a common misconception that people can get because, truth be told, every house, building, and property actually sits in a flood zone. It just depends on what type of flood zone you're in.

You see, when people say that they're not in a flood zone, this generally means that the property is not sitting in the special flood hazard area (SFHA). When it comes to the Federal Emergency Management Agency (FEMA), every house has a flood zone designation.

Most likely, when your mortgage or agent tells you that the house is not in a flood zone, what they meant is that you don't have to go face a mandatory flood insurance purchase because it's not in a 100-year flood zone.

Examples of a 100-year flood zone are flood zones A (flood zone A, flood zone AE,  flood zone AH, flood zone AR, flood zone AO) or even a flood zone V which is the coastal flood zone.

What this probably means is that when it comes to flood zone maps, the property is sitting on a flood zone C, flood zone B, or even flood zone D. Most likely, this may show up as a flood zone X and the reason why they say that you're not in a flood zone is that your flood insurance won't be required since you're in low-risk flood areas.

The Problem with Low-Risk Flood Areas

Now, it's easy to find peace of mind when you realize that you're in a low-risk flood zone where the requirement for flood insurance isn't really there at all. The problem with these zones is that 30% of the flood insurance claims come from this area according to FEMA and the National Flood Insurance Program (NFIP). Homeowners that say that they're not in a flood zone are the ones that comprise that 30% and we're only talking about FEMA's numbers.

Being in a low-risk flood zone doesn't really mean that you won't get flooded like the high-risk flood zone. There might be minimal flood hazards in the area which is why it shows that you're in these zones, but there are varying reasons why a property owner in a flood zone X can be flooded.

We've also seen low-risk zones get flooding damage due to flash floods and other severe floods throughout the year.

This is why we encourage everyone to secure flood insurance policies for their residential property or even commercial flood insurance for their business. The chances of flooding can be very low one day then skyrocket the other day, given the right circumstances. 

So when you hear someone tell you that you are not in a flood zone or they are not in a flood zone, take time to reach out to your local floodplain management standards and officials or your insurance agent to really identify what your flood zone is. It's better to be safe than sorry when the risk for flooding becomes too high and loss from flood damage becomes too unbearable.

If you have any questions on flood zones, maybe you want to know what flood zone you're in, what your flood insurance options are, or anything about a flood. Reach out to us through the links below.

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

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Spring seems to be very far from keeping the rainy season from the locals of Baton Rouge in Louisiana. Today, we want to talk about the flooding that happened on May 17 (Monday) over at Baton Rouge, its impacts on the residents, and what it can mean for your flood insurance.

Rainfall and Flooding in Red Stick

It's been a long night in Baton Rouge as a slow-moving rainstorm dumped 10-12 inches of rain before midnight even struck. This in turn immediately prompted the National Weather Service (NWS) to declare a flash flood emergency across Ascension, Iberville, Livingston, and East Baton Rouge.

This caused the I-10 eastbound to be closed past Siegen Lane due to the standing water that inundated the highway. Speaking of flooded roads, fire departments had to respond to a number of water rescues for people who drove into high water.

This caused about 7000 locals to also face huge power outages. At the time of writing, the flooding extended to the early morning of Tuesday (May 18), so we're still waiting for the official damages that this flooding brought Baton Rouge, and considering the constant threat of flood, this event may still be extended.

Now, let's talk about things that you really need to know about your flood insurance in times like this.

Louisiana Flood Insurance

At the time of writing, we're looking at the state of Louisiana under threat of the upcoming low-pressure and storm systems, and at times like this, you want to make sure that you get your flood insurance in place and know how to really use it for the best when it comes to protecting and repairing your property from flood damage.

We want to talk about what to do before, during, and after flooding happens, so that you can maximize what coverages your policy is going to offer you regardless of it being from the Federal Emergency Management Agency (FEMA) or private insurers.

Loss Avoidance

It's important to note that Baton Rouge flood insurance policyholders can go through loss avoidance. Now, this is one of the things that people forget that they have on their flood policies, but this can really help you reduce the impact of floodings significantly.

Loss avoidance is a coverage that goes up to $1000 and this helps the insured to get coverage for the expenses of getting sandbags, fills for temporary levees, securing water pumps, and even the labor that goes into making these things be a part of your flood preparation. In times like this, preparing for an imminent flood that can happen any time can help you avoid damages or at least reduce it significantly.

Don't File that Flood Claim!

Stop! Don't you want to know why we discourage filing that flood claim immediately at times like this? Well, let's unpack what happens after you file these claims.

Now, generally, I'd recommend that whenever you file your flood claim since you just had flooding in your area, you want to make sure that it's at least $10,000 in damages to make sure that you get the best out of it. If it's really not that significant of damage or maybe less than $5000, $10000, you might want to hold off on filing that flood insurance claim and strategize with your insurance agent first.

Filing a flood insurance claim will grant you the coverages written on your policy however at the same time this can put your property in a bad light since there's something that's called a severe repetitive loss (SRL), sometimes known simply as repetitive loss, property list.

It's important to remember that, unlike other insurance claims, flood claims stay on the property's history forever. This is why a property that files for more than one flood claim in the last ten years will immediately be marked as a repetitive loss property.

When you get into this list, you'd expect your flood insurance premiums to go up especially if you decide to not agree with or failed to do the strict flood mitigation efforts from FEMA. This also drastically hurts the resell value of the property because you don't want to buy a very flood-prone property, right?

Flood Insurance Options

Lastly, we want to talk about your flood insurance options. If you aren't impacted by this recent flooding then it's good enough of a reason for you to make sure that you ensure that you have a flood policy taking effect on your property at all times.

The NFIP

Louisiana is a part of the participating communities in the National Flood Insurance Program (NFIP) from FEMA. This means that you get access to the federal flood insurance, disaster aid, and disaster grants that FEMA and the federal government provides. 

This means that Baton Rouge locals that go through FEMA get the coverages from the NFIP that maxes to $250,000 in property or building coverages and $100,000 for contents or the items inside the listed building. However, unless there's a presidential declaration additional living expenses and loss of use won't be provided in your standard National Flood Insurance Program policy. There are also no replacement costs with federal flood insurance.

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Since Baton Rouge is a participating community, depending on your Community Rating System (CRS) score, you're legible to get discounts on flood insurance premiums of up to 40%. With flood insurance premiums averaging $750 in Baton Rouge, it means that you get to have your rates go down to $450.

If you're looking to get a policy from the NFIP, it's important to note that you're going to have to follow the 30-day waiting period before your policy can take effect on your listed property.

The Private Flood

We also have to consider that if the NFIP coverages don't really fit what you and your property need, you can get flood insurance from private insurers.

The private flood insurance market is becoming more popular across the country and one of the possible reasons is that it has significantly lower premiums. In Baton Rouge, the average rates from FEMA are about $700 to $800 but in the private market, this can go down to an average of $300 to $400. 

Coverages in private flood can be more than $250,000 for property coverage and more than $100,000 since they don't have those max limits compared to FEMA. Private flood also includes additional living expenses, replacement costs, and loss of use. All of these coverages can take effect within 15 days and some carriers we know can actually write you a policy within the day.

We're going deeper into the eye of the storm seasons, per se. It's pretty normal to expect a lot of rainfall, hailstorms, and flooding which is why you should know how to best protect yourself from these damages. We may not be able to stop these from happening, but we can be sure to prepare how to recover from it.

If you have questions on the flooding that happened in Baton Rouge this week, flood insurance options, or anything about flood, reach out to us.

Remember we have an educational background in flood mitigation and we want to share this to help you protect your property's value long term. Click the links below to call us, get a quote for your flood insurance, or visit our YouTube channel for your daily dose of flood education videos.

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

The times have been changing and if we look at the world around us, we may see some things that shouldn't be like that. If we look at how weather patterns have drastically changed and natural disasters becoming more severe, we can see that there's something wrong with the planet. That's what we want to cover today, we want to understand climate change and global warming, how are they different, and their impacts on our planet.

The Flood Insurance Guru | Blog | Climate Change and Global Warming

Climate Change

First, it's important to preface that climate change is not a synonym for global warming. Climate change is a phenomenon that scientists have been looking into even 200-years ago. They were looking into how our activities impact the climate of the Earth. It took them about a hundred years before even arriving at evidence that suggests a link between the two.

Climate change, as the name would show, is the drastic global or regional changes to climate patterns. Now, it's important that you don't confuse weather with climate. Climate is the collective weather conditions that an area experiences in a long period of time whereas weather is just how the day or maybe the week will be (like situations where we say today is sunny, rainy, or cloudy). Climate is more concerned with the prevailing weather conditions over the course of the next three months or maybe the whole year.

The Flood Insurance Guru | Blog | Climate Change and Global Warming

Climate change includes global warming but also concerns itself with the drastic weather changes other Earth being too warm. We can look at what happened in Texas earlier this year, where the state had severe winter storms or Egypt receiving snow due to the cold snap in 2013. 

Generally, climate change is blamed to be caused by the significant rise of greenhouse gases since the industrial revolution and the modern age. These are gases we release every day from smoking to car emissions and large industrial factories releasing the smoke as a byproduct of making their products.

The Flood Insurance Guru | Blog | Climate Change and Global Warming

Global Warming

Global warming on the other hand, as the name would show, is the overall drastic and continuous warming of the Earth. This is one of the impacts of Climate Change. See, when we say global warming isn't a synonym of climate change, it's because global warming is one of the effects of climate change.

As the planet heats up, we can see a rapid rise in sea levels and this isn't just because there's a hurricane, but in a more permanent sense of the change regardless of the amount of rain. This in turn can cause a huge threat of storm surge and flooding in coastal areas because seawater can easily get through the land.

The Flood Insurance Guru | Blog | Climate Change and Global Warming

Global warming is also a catalyst for more severe storms and rainfall, especially for the United States. As we get over the winter season and its colder temperatures, the sudden surge of significantly warm air brings devastating rainfall, storms, and worse hurricanes when cold winter air clashes with the upcoming warm spring season

Global warming's unnatural levels of heat also melt — at an abnormally fast rate — the ice and snow from Winter which presents the constant threat of flash flooding in areas close to these once-frozen bodies of water.  This is what we commonly refer to as spring runoff.

The Flood Insurance Guru | Blog | Climate Change and Global Warming

Both climate change and its effect on global warming are the biggest threat when it comes to the natural response of Earth to natural disasters. Due to severe wildfires taking down trees that protect us from flooding, landslides, and mudslides, but this didn't come naturally.

What Caused It?

It's often mentioned that the climate change we're experiencing is the result of our actions as humans. Yes, there's a natural way that climate change can happen, but the impacts of these are smaller and short-term compared to the long-term and huge impacts that manmade climate change is bringing.

Numerous factors contribute to greenhouse gases known as the greenhouse effect. One of the biggest causes is because we're burning a lot of fossil fuels like coal, oil, and natural gas to power everything we need like cars or other transportation, and daily energy uses like electricity and heat. These fossil fuels we're burning actually contributed about 80% of the total greenhouse gas emissions. All the abandoned oil and gas wells that are now leaking produce more methane than initially estimated that which contributes to 20% of annual methane emissions

The Flood Insurance Guru | Blog | Climate Change and Global Warming

We can also look at deforestation and wildfires taking down trees that naturally help us fight these gases. Brazil, last year, reached an increase of almost 10% on deforestation. This became the highest level since 2008 and caused even more severe forest fires that further take down trees in the area.

Climate change is the biggest hurdle we're facing when it comes to preserving the state of Earth. We always talk about preserving the value of your property long-term by protecting it from flood damage, but it can only go so far. When faced with bigger, more volatile, and violent floodings, even the best flood mitigation efforts might not be able to handle it.

The Flood Insurance Guru | Blog | Climate Change and Global Warming

We should also do our part in helping fight this climate crisis, so we also avoid severe natural disasters which only become worse each year. If you have any questions on global warming, climate change, how this can impact flood insurance, how this can worsen flood events across the country, or anything about flood, reach out to us.

Remember, we have an educational background in flood mitigation and we want to help protect you and your property against flood loss long term. Click the links below to know more, get a quote to protect yourself from flooding, and visit our YouTube channel for our daily flood education videos.

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

When there's flooding and houses impacted, you can expect that there will be a lot of flood claims with it. Although generally, we recommend refraining from filing that flood claim if the damages are not that big or less than $10,000 in order to make sure that you avoid getting into the repetitive loss (RL) property list in Federal Emergency Management Agency (FEMA), we understand that there are times where filing that claim is simply inevitable.

The Flood Insurance Guru | Blog | Who Can You Trust After the Flood Claim?

Once this happens, we usually get a lot of questions along the lines of "this flood claim isn't good for my property. Who can I trust on flood insurance?", so today we answer that question, determining the best flood insurance provider, and the other impacts of flood claims on flood insurance options in the future.

After the Flood

First, let's talk about what you should expect after you file that flood claim. Now, it's important to note that other than getting the coverage promised in that flood policy, the flood claim can also tell you the possible state of your property when it comes to both FEMA and the private flood insurance market.

After the flood claim, you can expect to receive the coverage in your policy, and in the case of FEMA, this may mean that you're going to have to scour for the repair company as a second option. However, it's highly discouraged that you decide on choosing the repair company if you're aiming to get cheaper costs. Most of the time these cheaper repair companies aren't approved by FEMA and won't fit the standards and guidelines on repairing a flooded property which can mean that they won't provide coverage for the costs of repairs

The Flood Insurance Guru | Blog | Who Can You Trust After the Flood Claim?

Often times, FEMA and private insurance companies have the power to decide how to respond to the flood claim. They can choose whether they'd replace and repair the damages through their preferred repair companies or they may provide the cash needed for the repairs and the insured will be the one to find the repair company that fits the expectations of the insurance company. There will be some cases that they won't decide and will ask for your plans on the flood claim.

If this is you're second, third, or maybe the fourth claim within the last ten years this will be sure to affect how your property appeals to private flood and how it would be listed in FEMA's data. There's something that's called "repetitive loss (RL) property" which only happens if you file more than one claim in the last ten years.

Now, when it comes to flood claims sometimes it's avoidable, but sometimes it isn't. This is why you should also strategize with your insurance agent on how to approach flood claims and when it's really necessary to file one. As much as possible, it's best to keep your flood claim to a minimum or once only for every ten years in order to avoid being placed in the repetitive loss (RL) list. 

The Flood Insurance Guru | Blog | Who Can You Trust After the Flood Claim?

Repetitive Loss

Repetitive loss isn't based on a flood zone, so this doesn't mean that because you're in a Flood Zone AE, you're most likely to be in the RL property list. The repetitive loss property is determined through the number of flood claims made across the life of the property. So, it may be that you're in a low-risk flood zone but is still under the repetitive loss list due to the multiple claims you did in the last ten years.

When you're placed on the repetitive loss property list, you may expect FEMA to raise your flood insurance rates drastically as a response to the large number of funds that these properties are drawing in from FEMA. The rising of premiums and rates really depends if you're willing to accept the mitigation efforts that FEMA will ask you. If you decide to reject this offer, then your flood insurance will increase but not more than that actuarial rate for your property.

However, this doesn't mean that FEMA will let go of you due to the number of claims you did in the past 10 years. This is why we always say that FEMA and the National Flood Insurance Program (NFIP) takes all the risks.

The Flood Insurance Guru | Blog | Who Can You Trust After the Flood Claim?

This is very different from the private market. Private carriers generally non-renew a policy after they receive a claim and we've seen this happen recently with a client. They filed a flood claim with this private carrier and four days after, the private carrier sent them a non-renewal letter. This is why we always preface private flood with their ability to pick and choose the risks they're willing to take.

Some private carriers may still be available out there, but generally, RL properties are something that they shy away from due to the extreme risks it has when it comes to flooding. If you know that you're on the repetitive loss property list, you might want to reconsider trusting private flood since they're more likely to non-renew your policy or overall refuse to provide insurance for your property.

Flood Insurance Options

When it comes to filing a flood claim, you always need to remember that you can still have the two options when buying your flood insurance: FEMA and the private market.

The NFIP

Like we've mentioned, FEMA doesn't really get to pick and choose their clients so you can still go through the National Flood Insurance Program (NFIP) granted that you're in a participating community. This guarantees that despite your recent flood claim, you can go through FEMA again and expect that they won't process a non-renewal due to the claim. The NFIP will provide maximum coverage of $250,000 for property or building damage and $100,000 maximum for contents coverage.

You may also be registered for the Increased Cost of Compliance (ICC) program which can provide additional coverage of up to $30,000 for flood mitigation efforts which can really help prevent your property from getting those increased rates if it were to be listed in the repetitive loss property.

FloodSmart | Flood Preparation and What To Do After A FloodThe Flood Insurance Guru | Blog | Who Can You Trust After the Flood Claim?

The Private Flood

You may also go through the private flood insurance market still although this might be something that you shouldn't put high hopes into. Most properties with recent flood claims generally get rejected from the private flood however the good thing is that since there are dozens of carriers or private insurance companies in this market, you may find another carrier that will write a policy for you.

The private flood insurance market provides more than the maximum limit of the NFIP and generally with lower premiums. This means that you can get more than $500,000 in property coverage and more than $250,000 in content coverage.

If you're written a policy from private flood, you can also get coverage for additional living expenses, replacement costs, and loss of use which can really help you recover from a flood loss.

The Flood Insurance Guru | Blog | Who Can You Trust After the Flood Claim?

At the end of the day, your best friend in this type of situation is your insurance agent, so make sure to consult them on what to do before, during, and after a flood. Always feel free to ask how to approach flood claims and the possible impacts of it moving forward. Through your agent, you may also get an idea of which carriers generally won't approve of properties with flood claims or in the repetitive loss list.

If you have any questions on flood claims, flood insurance options, and how to best manage your flood insurance, feel free to reach out to us using the links below. You can also visit our YouTube channel for our daily flood education videos or call us to know more.

Remember, we have an educational background in flood mitigation and we want to help you get the best deal out of your flood insurance in order to best protect you, your family, and your property from flood risks. 

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