The flood insurance market has been constantly changing for a couple of years. We've seen this happen for federal flood insurance and even for flood insurance availability.

One of the biggest changes came in form of allowing private flood insurance for property owners who have an FHA loan, USDA, or even VA loan. In this article, let's talk about how the private flood insurance market is changing the whole flood industry.

How Private Flood Is Changing the Flood Industry

Coverages

When it comes to understanding how the private flood is changing flood insurance coverage, we first need to get a basis or some form of comparison to the National Flood Insurance Program (NFIP).

So, let's just mention here that when it comes to federal flood insurance, you only get a maximum of $250,000 in building coverage and $100,000 in contents coverage or personal property coverage for residential flood policies. This coverage amount can go up to $500,000 if you're doing a commercial flood policy.

Now that we've established this, it's important to highlight that private flood insurance companies don't have these coverage limits. You can definitely still get more than $250,000. Even when it comes to personal items or content coverage, you can definitely go more than $100,000 for flood damage. That coverage also comes with the loss of use, additional living expenses, and/or replacement costs.

Flood Insurance Guru - Flood Risk Verification Tool

Pricing

When it comes to pricing, private flood insurance also offers more flexibility and is generally cheaper. This is especially true if we look at how the National Flood Insurance Program (NFIP) Risk Rating 2.0's impacts which will cause around 77% of the properties to get an increase in premium rates.

To know more about private flood insurance pricing, watch the video below to know more:

Claims Payout and Wait Period

Now, let's jump into what may be the most crucial parts of your flood insurance policy: claims and wait periods.

When it comes to wait periods, private insurers generally have a quicker turnaround time for your policy to take effect on your property. Most private flood insurance policies can be available and take effect on your property within a maximum of 15 days.

This is relatively shorter than federal flood insurance with a strict 30-day period. This can be helpful since you immediately get coverage and flood protection on your property quicker.

This type of faster wait time is also applicable for a claims payout. When filing for a flood insurance claim with private insurers, you may get the payout on your private policy within a maximum of 60 days. Now, it's important to note here that this generally depends on private carriers, so your flood claim may be available at an earlier time.

Payment Options

Payment options with private flood are almost similar to the National Flood Insurance Program (NFIP). So you can pay this out of your pocket or through your mortgage bank. When we say that you pay out of your pocket, this means that you pay for the whole premium via cash or using your own funds.

This is drastically different from mortgage payments since carriers would generally bill your bank for your flood insurance. What is important to note here is that there will be more mortgage payment options moving forward as the private flood is now available even for FHA, USDA, or VA loans.

Additionally, some private flood carriers may offer quarterly payments. This may provide more flexibility in paying your flood premiums, but there will be no delay in your flood protection and coverage. This can really be beneficial for premiums that are relatively high. Although banks may not be able to push through with this, paying $2,000 quarterly is way easier than paying it whole upfront.

It's also important to mention here about payment grace periods which, depending on your carrier, may have a 29-day grace period, 7-day, or even no grace period at all for payments to be made.

Want to know more about the difference between NFIP & Private flood in 2023?
Watch this video below to get started:

CHANGING FLOOD MARKET

So this is how the private flood is adapting to the constant changes in the flood insurance market. It's important to keep in mind that this generally doesn't guarantee that it's the best option for your needs. Sometimes, private flood may not be available because most of its assessment isn't based on flood zones alone.

If you want an in-depth understanding of private flood insurance, make sure click below to access our Private Flood Insurance Course:

Flood Insurance Guru | Private Flood Course

We will have to wait and see if federal flood insurance will also follow the path that private flood insurance is taking or one-up it by doing more to fight flood risks and provide more substantial flood protection for residents across the United States.

If you want to start your flood insurance, follow these three simple steps:

  • Fill out this form — Get A Quote
  • Talk with our flood education specialist.
  • Get back to the important things in your life.

If you have additional questions that are related to flooding and flood insurance, make sure to visit our Flood Learning Center where we try to answer all your questions. Click below to start your flood learning with us!

Flood Insurance Guru - Flood Learning Center

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.

Flood Insurance Guru | Service | Knowledge Base

You can also click below to call us and we can discuss your flood insurance needs.

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 mitigating the value of 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.

Get Your Flood Risk Score Here!

Buy Flood Insurance Now!

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.

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.

The Flood Insurance Guru | Blog | Will Your Flood Claim in Pelham, AL Put You Back in Repetitive Loss List

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.

The Flood Insurance Guru | Blog | Will Your Flood Claim in Pelham, AL Put You Back in Repetitive Loss List

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.

The Flood Insurance Guru | Blog | Will Your Flood Claim in Pelham, AL Put You Back in Repetitive Loss List

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.

The Flood Insurance Guru | Blog | Will Your Flood Claim in Pelham, AL Put You Back in Repetitive Loss List

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.

The Flood Insurance Guru | Blog | Will Your Flood Claim in Pelham, AL Put You Back in 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.

The Flood Insurance Guru | Blog | Will Your Flood Claim in Pelham, AL Put You Back in Repetitive Loss List

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.

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

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

The Flood Insurance Guru | Stop Before You File that Nashville Claim

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.

The Flood Insurance Guru | Nashville Flood 2021 | Flood Damages

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.

The Flood Insurance Guru | Nashville Flood 2021 | Overcome the Flood

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.

The Flood Insurance Guru | Nashville Flood 2021 | Property Value

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:

The Flood Insurance Guru | 2054514294The Flood Insurance Guru | Chris Greene | YouTube

 

 

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.