On May 4th, Pelham and Central Alabama were severely impacted by huge storms that caused flooding in these areas. A lot of properties and homeowners were impacted and left with flood damage on their homes. Due to this, we're expecting a drastic increase in flood insurance claims considering the damages and since it's the natural response when you're faced with flood loss that might even cause you financial ruin.

In this blog, we want to cover how this flood claim can impact your flood insurance and property status, and the answer will this flood claim from the recent Pelham flooding cause you to be put in the repetitive loss properties again?

Spring Flood in Pelham 2021

As the month of May introduces itself and all the blooming Spring stuff, Central Alabama faced batches of torrential rains and storms that dumped 7 inches of rain. This brought about the constant threat of flash flooding that even the National Weather System (NWS) has to issue a flash flood emergency warning over the metro area. Some areas across central Alabama had flood water rise to 3-feet to the point that boats were actually needed just to get to places. This flooding also caused schools to close due to damages and about 97,000 power outages statewide.

After the Flood Claims

Now, it's expected that there will be a lot of flood claims that will come from Alabama due to this recent event and Pelham might be one of those areas with the higher count of flood claims.

Flood insurance claims will be the key to providing the proper coverage for impacted houses and residents. This means that once you file that claim, you're going to get the listed coverage on your flood policy in order to recover from this flooding. It may be that the Federal Emergency Management Agency (FEMA) or the private flood insurance market will decide on how to utilize this policy claim. They may choose to provide necessary coverages for repairs by picking their preferred repair company or they can provide you the money to start recovering.

On the other hand, flood claims have certain aftereffects that will impact not only your flood insurance but also your property's status when it comes to flooding. Generally, when you file a flood claim this shouldn't really impact your property other than helping it recover however this is only if you're filing for a claim the first time around. For Pelham residents, you may see after filing that claim that your house is now marked as a repetitive loss property.

Repetitive Loss Properties

Repetitive loss properties are insured buildings that filed more than one flood claim in the last ten years. So, if you previously filed for a flood claim from last year's flooding, this may mean that you're going to be a repetitive loss property.

In the case of the recent flooding in Pelham, it's most likely that locals have already filed a flood insurance claim for the flooding that happened early in February last year. Since the ruling is that there must be two or more claims made within the last ten years, this will be listed in FEMA's data. When you're on a repetitive loss list, you might face flood insurance rate increases upon renewing your flood policy.

In order to avoid FEMA's premium rate increase that's generally equal to 150% of the chargeable rate for your house, you may want to agree to FEMA's offer that you perform their approved flood mitigation efforts on your property. This way, you might still be on the repetitive loss list, but the increase in the flood premiums won't be there.

FEMA will also allow you to dispute this resolution on putting your property on the repetitive loss list. This can be done if you believe that your property's claims history is inaccurate or there are approved mitigation efforts made by the owner on the property in order to reduce future flooding and flood damage. However, this will be reviewed by FEMA, so it doesn't really guarantee that you're going to be removed from the repetitive loss list.

Flood claims may sound like a good deal when facing the aftermaths of flooding, but this is why we highly recommend that you should strategize with your insurance agent on what to do as these impacts will stick with the property forever when it comes to flood insurance, unlike other insurance policies. It's best to make sure that you understand what this can mean for your policy with FEMA and the availability of private flood insurance for your property.

Note that most private carriers won't write a policy if the property's risk of flooding is too high and being on the repetitive loss list may generally say that your house is very flood-prone.

So if you have questions on flood insurance claims, the repetitive loss list, flood insurance options, and anything about flood, feel free to reach out to us. Remember, we have an educational background in flood mitigation and we want to help you protect the value of your property long term. Click the links below to talk with us, get a quote for your flood insurance, and visit our YouTube channel for our daily flood education videos.

       

Don't be too hot in filing your Nashville flood insurance claim. You just might regret it.

It's been just a couple of year's time since Nashville, Tennessee — home of the famous hot chicken and Music — since the last flood disaster. Now, our friends in Nashville have to think of ways to overcome such damage to their property, livelihood, and overall way of life. In order to grasp why we want you to stop and think before you file that flood insurance claim in Nashville is due to its history throughout the years.

 

First, we'll have to travel through time and look into the past — well, at least the last decade or so — to understand how these flooding affects your flood insurance and why you should be careful on filing a flood claim. For our friends outside of Nashville, this is useful information for you too as we might have some intermittent weather this coming week.

Keep in mind throughout that your standard homeowners insurance is different from your flood insurance regardless if it's from the National Flood Insurance Program or Private Market.

Tennessee Flooding 2010

In 2010, middle Tennessee, west Tennessee, south-central and western Kentucky, and northern Mississippi areas were bombarded by flood damage when torrential rain occurred on May 1st and May 2nd. Within that week, the areas were severely affected still. A lot of businesses experienced financial losses to immeasurable extent after the devastating flood.

A lot of rivers crested at an all-time record throughout the ordeal. This directly impacted and escalated the flood damage in the area. Nashville broke rainfall records as well since it recorded 13.57 inches of rain during this two-day period — twice the 6.68 inches record way back in '37 after the Hurricane Fredric.

The 2010 Tennessee floods sadly caused 31 deaths in total. The total property damage was $2.3 billion. In flood maps and flood risks concern put Tennessee up there in the high risk flood zones. This also means that each property that had a flood insurance and filed a claim that may have helped in marking the state, their respective communities and properties under the "repetitive loss of use". Repetitive loss of use a property is any insurable building for which two or more claims of more than $1000 were paid by the National Flood Insurance Program (NFIP) within any rolling ten-year period since 1978. Keep this in mind.

Tennessee Flooding 2019

2019, what seemed to be a great year ended with a life-changing pandemic, but this wasn't the only thing that plagued Nashville. On the latter part of February 13.47 inches of rainfall was recorded. Same drill, this impacts flood insurance and flood claims.

This is also considering the National Flood Insurance Program's changes aka NFIP 2.0. In August of the same year, 7,535 flood insurance claims were made with the National Flood Insurance Program for their flood insurance policyholders.

Rising Above Floods

It's important to know these details (and any aftermath of natural disasters) in order to better approach your flood insurance claim in 2021 onwards. It's always important to consult your insurance agent, so you're certain that you're putting your money where it will benefit you. Although we might be talking about a monthly payments for your policy, that payment still totals to about $700 by the end of the year at the lowest.

"What should be the best process in filing a claim then, Chris?" Well, I'm glad you asked imaginary half of this conversation.

First, you must remember that it's very much likely that another rain will impact your community the following weeks, and with the pandemic still active, it's best to be making careful and well-thought decisions. Filing a flood insurance claim as soon as might hurt your chances at getting a better result from flood insurance companies as well as your eligibility for a claim.

Now, we mentioned that your homeowners claim is different from flood claim. This is because homeowners insurance claim usually says that your rate won't change if the incident is weather-related. A flood policy claim is different from a homeowners insurance policy claim since flood insurance is for the whole life of the property unlike the latter that may reset in 5 years time or so.

Flood Insurance Costs

Flood insurance cost should also be considered before filing a claim. Usually, we'd prefer that you pay it out of pocket if it's $5000 or less. This is because your flood insurance premium over the next 2 to 3 years after the claim will cause you to pay more money. If you have a separate policy for your secondary residence, this will have the same impact of costing you more money.

It's also possible that if you file a claim under a private flood policy, they will non-renew the flood policy due to the high rate of flood and water damage to the homes they insure.

Property Value

Your property having multiple claims will also directly impact the property's resell value since most people right now don't want to spend money over such properties. You'll be lucky to breakeven to be honest.

Floods present unprecedented risks over your property's value, your flood insurance, and your way of living, so it's very much important that you're careful with filing a claim. We always want you to reach out to your insurance agent to consult regardless of the policy being under National Flood Insurance Program or private insurers.

Remember, we have an educational background in flood mitigation, so if you'd like the best help on your decisions about flood claims, what to do if you're hit by a devastating flood incident, correct your misconceptions about flood, how a community's flood history affects your building, or any flood insurance questions at all.

We'd love to answer your common flood insurance questions and mitigate your property by helping you avoid more flood risks. Be safe out there and feel free to click our links below to know more:

 

 

Will my NFIP or FEMA flood insurance pay out in Alabama?

It's a question we get from property owners in Birmingham, Tuscaloosa, Montgomery, Anniston, and Huntsville Alabama everyday.

What is a Flood?

We are specifically looking at what the National Flood Insurance Program or NFIP and how they define a flood. In regards to private flood insurance in Alabama they normally follow the same guidelines for defining what is considered a flood.

According the NFIP manual a flood is defined as a normal dry area that is inundated with water. It specifically states that it must be 2 acres or 2 parcels.

When taking out a flood insurance policy many property owners are confused about coverages. They also are confused about what the real risk of flooding exist.

 

Alabama Flooding

Growing up in Birmingham Alabama I can tell you the flood threat exists across Alabama. I remember watching the Vestavia bowling alley parking lot flood every time it rains. Flood damage in these areas was very common but many times not filed as a flood insurance claims.

This occurred many times as flash flooding in the area. Many areas like South Shades Creek or the Cahaba River could rise quickly.

After the 2019 flooding in Alabama some people on Lake Logan Martin were surprised to find out they didn't have flood insurance coverage for things like docks.

Whether you live in a low risk, moderate risk, or high risk flood zone it's important to know if your flood insurance policy will actually pay out on a claim.

It's important to know that generally most homeowners insurance policies will not cover flood.

So what exactly does FEMA or NFIP consider a parcel? According to the NFIP manual a parcel can be considered a roadway if it touches another property. This is important to understand if your home is the only building flooded. You want to make sure flood coverage you pay for would actually pay out.

So if coverages do pay out after a flood in Alabama what does flood insurance cover? It depends if you have a private flood insurance policy or an NFIP policy. Coverages provided can be different. Let's look at coverages that can be provided on an NFIP flood insurance policy.

• Building coverage
• Contents coverage (Personal property)

Depending on what coverages you select flood insurance costs could range and you could end up with affordable flood insurance. NFIP offers up to $250,000 on residential buildings and up to $100,000 on contents coverage.

Just because policies have a certain amount of coverage does not mean you would receive that on a flood insurance claim.

NFIP has an 80% rule when paying out claims. This means in order to have replacement cost on the building in Alabama you have to insure for 80% of replacement cost or get the max amount of building coverage through the National Flood Insurance Program. Many private flood insurance companies also have this guideline.

 

We have actually seen some private flood insurance companies require 90% of the replacement cost and not look at the max amount of coverage available.

Contents coverage on flood insurance policies work a little bit differently in Alabama. If doing a flood policy through the National Flood Insurance Program these are written on an actual cash value basis.

So what does this mean?

Think of it like this replacement-cost-depreciation = actual cash value.

So if you have some antiques in your home you could be disappointed come flood insurance claim time.

The good news is many private flood insurance companies do offer replacement cost on contents in Alabama. We recently saw this as a benefit with the hurricane claims in Alabama and the 2019 flood claims in East Alabama.

So you have a good understanding of what is a flood and flood insurance coverages.

Where can you buy flood insurance?

When purchasing flood insurance you can purchase it from any insurance agent in Alabama that offers flood insurance.

Are all flood insurance companies the same?

Will flood insurance rates be the same?

If you are purchasing flood insurance through the National Flood Insurance Program rates should be the same unless you have an elevation certificate or you are doing a policy assumption.

 

An elevation certificate can give you the most accurate rate with NFIP, but many times private flood insurance companies do not use them.

When selecting a flood insurance agent or agency you want to make sure you pick someone who offers NFIP and private flood insurance.

You also want to pick someone who is educated about what homeowners insurance policies will cover when it comes to flooding.

You also want to work with someone who can help you understand the true flood risk. We are not talking about just what your flood zone is but about understanding flood threats and the history of flooding in the area.

You also want someone who understands floodplain management ordinances and how it can impact your property.

What about the insurance company?

Are they all the same?

No they are not you want to look for a write your own carrier that administers flood insurance through FEMA.

What about after purchasing the flood insurance policy in Alabama?

Read over your flood insurance contract to make sure everything is correct including the flood insurance premium

Can you make a claim right away?

Generally NFIP has a 30-day waiting period on policies that are not for loan closings or newly mapped areas.

So maybe you have more questions about the flood insurance policy purchasing process?

Make sure to checkout our YouTube channel where we do daily flood education videos. You can also tune into our daily flood podcast where we provide up to date information on flood education and flood insurance.

You can also get a better understanding of your flood zone by visiting the flood mapping service

If you would like a flood insurance quote then click here.

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

 

So you have found out you are in a special flood hazard area. So now its time to find a flood insurance policy. 

So how do you pick the right flood insurance agent?

 

I mean all flood insurance is the same, right??

Today we are going to look at two approaches flood insurance agencies take when setting up flood policies. At the end we hope to help you pick the choice that is right for you.

First if a flood insurance company tells you all flood insurance is the same this is a great sign that they are not the right flood insurance agent for you.

All flood insurance is not the same. Even flood insurance through the National Flood Insurance Program might now be the same.

There are many things that could give someone a different rate. There are three things below that we will take a quick look at.

1. Elevation certificates
2. Policy assumption
3. Grandfathering

 

Elevation certificates could show a big difference in rate. If this elevation certificate shows you are above the base flood elevation it could give you a great rate while without it the rate maybe much higher.

Policy assumption is another way that National Flood Insurance Program rates could be different. This is when one policy is signed over from one property owner to the next.

We have see more than $3000 rate here. You see when you set up a new policy with National Flood Insurance Program its based on current rates and guidelines.

However when a policy is assumed it is going off the guidelines of when the policy was set up. If this policy has been in place even more than a year it could be much cheaper rates. This is why we recommend looking at a policy assumption when possible.

So what about grandfathering?

 

Trust me grandfathering can make a big difference in rates when available. I know I had to grandfather my own property in Monroe Georgia almost 10 years ago. 

I was told flood insurance would be more than $3000 a year. However because of my educational background in flood mitigation and understanding grandfathering my rate $350 a year.

So as you can see there can be a lot of differences in rate with the National Flood Insurance Program.

However you also don't want to forget about private flood insurance. If someone tells you it doesn't exist or they don't offer it then they might not be the right flood insurance agent for you. Private flood insurance can offer some unique coverages and pricing.

Now lets look at transactional and consultative

Transactional Flood Insurance Agencies

Transactional flood insurance agents or agencies many times are trying to make the process as quick and painless for you. There can be some benefits to using them like the cheapest rate some times and getting things done quickly.

These type of agencies are usually based on volume so they are doing a lot of these policies everyday.

However many times where this can be a danger is picking the right coverages and long term impacts.

On these transactional agencies many times they will have you pick the coverages or will put what the mortgage company requires. This can be dangerous if you are like most consumers you probably aren't sure what coverages are needed for flood insurance.

To give you an example of these I spoke to a client yesterday that wanted 8,000 in contents coverage for his lake cabin. We started talking about furniture and personal belongings in the cabin. It had at least 50,000 worth of stuff. So we recommended about 100,000 in contents coverage for them.

You generally may not get this with a transactional flood insurance agency. Now let's look at the long term impacts. Many times these transactional flood insurance agencies do not look at long term impacts on the customer.

We are talking about long term rates and the impact of flood insurance claims. Wouldn't it be nice to know how stable flood insurance rates are in an area over a 5 year period. Wouldn't also be nice to know how flood insurance claims might impact you before filing them.

These are some of things you don't get with a transactional flood insurance agency. Now let's look at consultative flood insurance agencies.

 

Consultative Flood Insurance Agencies

Have you ever had a problem you needed help walking through and wanted to know what solutions are available. You might even need help getting to these solutions. This is exactly what consultative flood insurance agencies do.

They walk property owners through the following things

1. Flood insurance coverages
2. Flood insurance options
3. Flood zones
4. Flood mitigation
5. Long term rates
6. Impacts of flood claims

So let's look at flood insurance coverages first. These type of agencies or agents walk customers through understanding building coverage, contents, coverage, loss of use when available, and deductibles.

Consultative flood insurance agencies generally do a good job of using examples of when each coverage would be needed.

For example the difference in coverage for appliances and furniture. One might be part of the building and the other one may not.

Then there is flood insurance options. This is where a consultative flood insurance agency could save you a lot of money and headaches long term.

A good consultative flood insurance agency shows the customer the difference in the national flood insurance program and private flood insurance companies.

 

They show them the benefits and negatives. For example what if you saved a $100 by switching to a private flood insurance policy this year. However it cost you a $1000 more next year. Wouldn't be nice if someone could show you that.

Now when it comes to flood insurance rates a consultative flood insurance agency may not have the cheapest rate but it can be the best policy. No one cares how much money they saved when a flood insurance claim occurs and they have nothing.

This could help you as a property owner make a better decision on flood insurance.

So what about the long term impact of flood insurance claims.

Flood insurance claims work differently than property claims. When a traditional home insurance claim occurs it might stay on the insured and property record for 3-5 years. If the insured goes to buy another home this claim might hurt them. This is not the case with flood insurance claims as they follow the property.

However flood insurance claims can stay on the property forever. For example many private flood insurance companies will not insure a property that has ever had a claim. Others may not want any claims in the last five years.

So what if you filed a $1500 claim on a policy with a $1000 deductible? Well if it s a private flood insurance policy then the policy could be non renewed.

In fact we recently saw this happen with a property owner 2 weeks before renewal. They ended up having to go back to the National Flood Insurance Program with a rate that was $5000 higher.

These are the type of things that consultative flood insurance agencies can help you avoid.

So you might ask what is The Flood Insurance Guru?

We pride our selves on being a consultative flood insurance agency.

So if you have further flood insurance questions or how to pick the right agent click here.

You can also check out our daily flood education videos on our YouTube channel.

You can also tune into our podcast by clicking here.

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