Home insurance companies are offering a new water endorsement for homes across the country.

In this article, we're going to talk about the dangers of using these water endorsements as a replacement for flood insurance. We're going to cover important things to know about these insurance products, and we're going to show you how you could lose your home if you have either of these insurance products.

Water Endorsement Dangers

Now, it seems that this new water endorsement from your homeowner's insurance policy might be the best deal since it will help you avoid getting another policy just for flood damage. However, one of the biggest dangers of using this as a replacement for flood insurance is coverage.

Let's do a quick review first of what flood insurance offers for your protection against flood damage.

Flood Protection

First, let's define what flooding is. This is when at least 2 acres or 2 properties are inundated by water. This may be due to heavy rain, overflow of rivers or any body of water, or snowmelt. This is the same rule that flood insurance follows.

If you go through federal flood insurance and the National Flood Insurance Program (NFIP) under the Federal Emergency Management Agency (FEMA), you will be able to get at most $250,000 for building coverage with a maximum of $100,000 for contents or personal property inside that home.

On the other hand, this water endorsement will generally cover ten to fifteen percent (10% - 15%) of what a standard flood policy offers. This means that you're only going to get around $20,000 to $30,000 for flood coverage.

Although it follows the same rules of what is considered a flood, since different homes have different prices, this may present some benefits or potential disadvantages. Depending on your insurance provider, this amount may have the same limits as your sewer or drainage backup up to the dwelling limit.

As much as this water endorsement may be beneficial for you, it may not be able to really address the coverage needs you may have when it comes to flooding. Generally, this amount may not be able to fully cover the replacement costs of your home.

It's also important to note that, unlike flood insurance services, water endorsement won't be able to cover all of your property that's been affected by flooding. This is especially true if you're living on a property in a high-risk flood area or near a body of water where flooding can happen drastically in a short period of time. 

This coverage may only cover your basement and the first floor however anything past that might not be part of your coverage.

Availability

You might be thinking of saving more of your money by canceling your flood insurance and using water endorsement as your flood protection. We generally discourage this since it also presents a danger when it comes to your insurance coverage.

Water endorsement availability also depends on your insurer as there may be insurance providers that don't have this type of additional coverage.

Generally, by doing this it may also mean that if your homeowner's insurance is nonrenewed, it will take your flood coverage with it. Once your homeowner's insurance is canceled or nonrenewed by your insurance company, you might not be able to get this water endorsement from a different insurance provider since it's basically embedded with the policy.

This is a different case with flood insurance being a separate policy that won't really be impacted if such that situation happens.

This water coverage is not going to be easily acquired too. This is because your mortgage lender or bank will likely be the one to determine if the policy limits of this new water endorsement will be enough for your home. Simply put, if your bank will not accept this coverage, you might still need to get a separate flood insurance policy.

How Flood Insurance Helps

This new water endorsement may not really be able to give full coverage unlike a separate policy like flood insurance. So relying everything on your homeowner's policy may not be the best line of defense as a property owner for property damage due to floods.

Although it may be risky to rely your flood protection on water endorsements solely, it may also be of great help if you combine it with an existing flood insurance policy. This could mean that you can go past certain policy limits of flood insurance coverage by using water endorsement from your homeowner's insurance policy as excess flood insurance.

You may also find more comfort and security by knowing that you can get around $270,000 just for building coverage alone with the water endorsement and your standard flood policy coverages combined.

At the end of the day, you shouldn't settle for less when it comes to the protection of your property and investment. Floods can happen anytime and most times, even just an inch of flood can cost thousands of dollars in property damage.

If you've got questions regarding this new endorsement with homeowners policies, how flood insurance premiums are determined, or anything related to flood insurance, click below to access our flood learning center.

Ready to solve your flood insurance problems? Here are the steps you can take:

• Fill out this form —

• Talk with our flood education specialist.
• Get back to the important things in your life.

Flood insurance can be complicated especially when it comes to the coverage it offers. We're here to clear things out so you can make the most of your flood policy and get time back so you could focus on the best things in life.

In this article, we want to discuss full coverage when it comes to flood insurance. Does it exist? How does it work? What does it mean?

Full Coverage

When it comes to flood insurance, it's best that we settle things straight. Technically, there is no such thing as full coverage. This phrase is only used by some insurance agents to describe the potential coverage that you will get for your property with a standard flood insurance policy.

It's important to remember that your homeowners' insurance policy generally does NOT have coverage for flood damage. Since a separate insurance policy is needed for flood damages, knowing your coverage can really help you avoid unnecessary headaches and flood loss.

So, you might be wondering what are your coverage options when it comes to flood insurance. In order to answer that, we'll have to break it down to your two options: federal flood insurance and private flood insurance.

NFIP Risk Rating 2.0

Your first option and you might already know about this is the federally-backed National Flood Insurance Program (NFIP). This is also sometimes known as a Federal Emergency Management Agency (FEMA) flood policy.

When it comes to NFIP, and even with their recent overhaul of the program with Risk Rating 2.0, you will be seeing some coverage limits there. Let's say that you need to get flood insurance for your home, so this falls under a residential flood policy.

Residential flood policies actually have coverage limits with the National Flood Insurance Program (NFIP). This limit indicates that you can only get a maximum of $250,000 for the building or structure of your home and only a maximum of $100,000 for personal property and contents of that insured home.

On the commercial side of things, the NFIP will offer only a maximum of $500,000 for building coverage and another $500,000 for business content within that insured building. This may make you ask, will this be enough?

Well, that really depends, but the way we see it now with increasing costs of materials, these limits might not be the comprehensive coverage you really need. Keep in mind as well that your flood insurance also needs to follow the 80% Rule.

This 80% Rule states that you should have a building coverage that is 80% of the total costs to replace or rebuild the property if you can't max out the coverage limit set.

Private Flood

On the other side of the coin, you have private flood. Being handled by private companies, insurers don't really have certain limitations on the coverage they can provide. Before we move forward, let's mention one of the biggest things you should know about private flood: flexibility of coverage.

Unlike the National Flood Insurance Program (NFIP), private flood insurance companies can provide additional living expenses and business loss of use with their flood policy. Although this may cause some form of an increase in premium rates, you might also be looking at an increase in protection against flood damages.

Private flood insurance can provide more than $250,000 and $100,000 in building and content coverage respectively for residential flood policies. The same can be said for commercial flood insurance policies with private flood, you can go more than $500,000 on your coverage.

This really helps a lot of property owners bounce back from flood events and if you have a somewhat expensive home or business, this coverage flexibility might be the best option for you.

Additional Living Expenses

As mentioned before, you may also get additional living expenses coverage. You might be wondering what this could be for and that's no worry since this may be new to you too considering that the NFIP doesn't really offer it for policyholders.

Picture this, you just got flooded and a lot of repairs are bound to be made to your home. Basically, during this time, the house would be unlivable in order to give way to rebuilding or repairs.

Additional Living Expenses coverage is what you can use to pay for the costs of rent or utilities. This can really be helpful relieve yourself of the stress of what just happened and the worry of finding a way to financially support yourself during this time.

This additional coverage can go up to $25,000 with private flood and this will only kick in with private flood insurance or when a presidential disaster declaration is announced for your community. 

Your Vote on Flood Insurance

Although there might not be full coverage with flood insurance, you still get all the necessary security you need. It's now left in your hands which one you would choose: the NFIP or private flood insurance.

If you want to know more about your flood risk, click below to see your flood risk and price.

Learn more about flood insurance with us by visiting our Flood Learning Center where we try to answer all your questions when it comes to flooding and flood policies.

Ready to solve your flood insurance problems? Here are the steps you can take:

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

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.

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.

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.

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.

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.

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

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. 

The Build Back Better Act has been going back and forth on whether or not it aims to tax the higher-earning households or not. A lot of things are coming with President Biden's expansive social and environmental bill that aims to create a better quality of life for families across the United States. This includes providing and helping American families during crisis especially after what we experienced due to COVID-19 and addressing climate change impacts to our communities.

In the midst of the shape-shifting nature of political parties, the initial intent to address the risks and dangers of climate change is being scaled down. We won't dwell into the politics of it all despite it having a firm grip on how Build Back Better goes; that's a story for another day.

Will Build Back Better really build a better structure against climate change and really address the needs of our country's first line of defense against floods? Is Build Back Better just building a broken flood future for America?

What Build Back Better Includes

In the article of MSNBC on explaining the coverages of this act, they covered the following: $380 Billion will be for Child Care and Education, $555 Billion will be for Climate Change and Clean Energy Investments; this generally covers the $12,500 incentive for those looking to buy an electric car like Tesla or install solar panels. Capping prescription drugs costs at $2,000 per year for seniors as well as including Medicare coverage for hearing benefits, and $200 Billion for child tax credit extension to name a few.

However, as the bill was passed a lot of things got changed such as taking out the dental and vision coverage, free community college, lower prescription drug costs, and the paid family leave which was something that public polls were really hoping for.

The changes also include a significant scaling down of funding for the risk mitigation for climate change which is, to be honest, what Build Back Better was for.

Does Build Back Better Include Flood Risk?

Flood Map

We want to focus on the significant changes on how Build Back Better addresses one of the key concerns with climate change and safeties of families across the country: the federal flood insurance.

Build Back Better was initially drafted to cover $3 Trillion to ensure that all items are ticked by dotting all the i's and crossing all the t's, but across its 12-week course, a lot of things were cut down and only about $1.75 billion was approved by the senate. Simply put, this meant that some areas' overall costs were also lowered.

Initially, the original Build Back Better draft provided $3 Billion to improve the flood mapping hence addressing the overall understanding of the flood hazard of communities with or without an extreme event like disasters, hurricanes, and things like that. This proposed amount intends to create a system in which federal flood insurance will be able to provide you and your community with updated flood risks based on the flood mapping.

You might be thinking, this number's too big just to address flood mapping in which we would say the Association of State Floodplain Managers stated that FEMA would need between $3 billion and $12 billion to address this concern with flood mapping across the country.

This intends to prepare for the impacts of climate change especially with the frequency of flooding and its severity. With this funding, flood hazard mapping will not only address your current flood risk but also your future flood risk. This can really be helpful especially for disadvantaged communities who don't even have a flood map. In some cases, some flood maps take 15 years to get updated.

According to E&E News, the approved bill ended up cutting down the funding for this area to $600 million. That amount is just 20% of the proposed costs needed to make sure that flood mapping will be accurate and up-to-date.

It's important to keep in mind that the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) don't have a flood map for all and communities across the United States. The impact of cutting down the funding for this area can mean that your community will still have to wait a year or maybe even more just to get a flood map that reflects your current flood risks.

Additionally, what officials should know is that flood maps are crucial in understanding where the water is coming from. This also helps everyone understand where and how to build developments as this direct changes how floodwater behaves especially for vulnerable communities like those surrounded by rivers or the coasts.

The thing is flood hazard mapping isn't just for everyone to know their flood zones for flood insurance, but also to understand first the risk of flooding in the area.

Flood Insurance Premiums

Another area of flood insurance that Build Back Better wanted to address is allotting $1 Billion for subsidizing flood insurance premium cost within the federal flood market. This intends to allow low-and-moderate income households to be able to buy flood insurance from FEMA and the NFIP. 

Generally, flood insurance with FEMA and the NFIP averages at about $1,000 per year, and with the Risk Rating 2.0 Program, this number can get more expensive for policies. It's important to keep in mind that a lot of people who aren't required to get flood insurance don't buy one because of its costs.

This funding helps get the program running and helps people understand that the cost of flood insurance can be cheap without the risks of not getting enough coverages. A lot of homeowners would be buying cheap flood insurance, not knowing that it won't fit their coverage needs. People do this to avoid the well-known affordability costs with FEMA and the NFIP.

However, this funding for the financial assistance when purchasing a federal flood insurance policy was also cut down to $600 million as well. 

The Future of NFIP

Looking at the bright side of the fence, it's still a good thing that federal flood insurance will still be included in the conversation as we move forward with the Build Back Better act.

Despite the funding being significantly scaled-down, this additional funding for FEMA and the NFIP can address the issues within the federal side of flood insurance. However, this action of scaling down what the Federal Emergency Management Agency (FEMA) really needs makes one ask...

When will flood risk become a priority for the government? For now, only time can tell as the Senate modifies this part of Build Back Better.

If you have any questions on how this will impact you, about your flood insurance, or maybe your flood insurance is trash and you want to update, click below to contact us.

You can also access our Flood Learning Center where we try to answer your common questions about floods, flood insurance, and everything in between.

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

Homeowners across the country are faced with a lot of insurance policies needed to sustain their property and homes. This ranges from your standard homeowners' insurance policy to other damage insurances. 

Today, we want to address one of the most common questions with insurance that homeowners usually ask. Does water backup insurance cover flooding?

What is Water Backup?

First thing's first, we have to address the actual definition of what a water backup is. Generally, water backup pertains to the incident(s) when something blocks or stops the natural flow of drains from the pipes that exit your home. This could be sewer backups that are clogged due to debris, overflow of rainwater, or when a sump pump fails so it forces water into your home.

Basically, the water that's coming from your home but failed to get out. This area covers things like septic systems, sump pumps, and/or sewer systems. This time of damage actually has coverage from your insurance however do you still need flood insurance when you're already covered for water backup coverage?

Is Flood Insurance Necessary?

To understand the difference between these two coverages, we first need to go back and understand what floods actually are. Generally, flooding is any incident where surface water from outside of your home inundates your property. This may be due to a storm, continuous heavy rainfall, or coastal flooding.

You might say that they should be covered within a single policy since they are both water damages to your property or home. However, it's important to keep in mind that these two things are different coverages.

Even if you already have water backup coverage, unfortunately, this won't really get you covered if we're talking about flood damage. This also means that flood insurance won't cover you for water backup since most insurance companies in the industry will be considering that "Rule of Two".

The rule of two on flooding, according to FEMA, states that surface water will only be considered a "flood" if it impacts at least two acres of normally dry land or two properties within the same area. Considering that water backup has a smaller scale which only impacts a single homeowner, it doesn't really fall into the coverage of flood.

Now, let's talk about your flood insurance options.

Flood Insurance Options

The NFIP

The National Flood Insurance Program (NFIP) is purely managed by the federal government since this is FEMA's answer to flood insurance. An NFIP flood policy can get you flood coverage on both your dwelling and the contents within it.

When we say dwelling, this simply pertains to either the residential property or commercial building that you're trying to insure with NFIP and FEMA; contents will be more about the personal property and items you have inside the insured building.

There is a coverage limit when it comes to federal flood policies. Flood damage to buildings will be covered to a maximum of $250,000 for residential policies and can only go up to $500,000 maximum if it's for a commercial property. Regardless of the type of property you have written, you can expect to get a $100,000 maximum contents coverage from an NFIP policy.

READ: National Flood Insurance Program Risk Rating 2.0 Update

There's also what's called the Increased Cost of Compliance (ICC) coverage. This is a $30,000 additional coverage for your property in order to make sure that there are flood mitigation efforts made on the property according to the federal government's standards.

Generally, this can include sandbagging your property, installing floodproofing walls, raising your lowest floor from the base flood elevation levels, and putting flood openings. The labor that goes into making these mitigation efforts happen will also be covered under the ICC.

There are also perks with your participating community. A participating community gets access to federal flood insurance and disaster assistance by meeting their standards on flood mitigation and disaster preparedness. The efforts put in by a community won't be unnoticed as this can help on raising your Community Rating System (CRS) score.

The CRS measures and rewards the overall flood mitigation efforts done by the community according to FEMA's standards on floodplain management. Simply put, the higher your CRS score is, the bigger the flood insurance discount you'll get from FEMA and the NFIP.

You can start enjoying your NFIP policy after a 30-day waiting period from the flood insurance purchase.

The Private Flood

If the federal flood insurance option doesn't really work for you then you can manage this new floodplain mapping through the private flood insurance market. It's important to note that this market will solely be managed and provided by private insurance companies which generally means that the red tapes FEMA and NFIP has to go through won't be there.

The first thing you'll immediately see with the private flood market is that there are significantly shorter waiting periods for your flood policy. Once you have everything settled and paid for, the wait period for the private flood carriers will follow a much shorter timeframe compared to NFIP. A private flood insurance policy can take effect on 7 or up to 14 days maximum. 

Another good thing coming out of private flood insurance is that there are no coverage limits. This means that you won't really need to stress over how to get covered for a $500,000 home since it will be fully covered by your policy. This is the same with contents coverage and you'll also get additional coverages like replacement costs, additional living expenses, and loss of use.

Fair warning, it's a known issue in the private insurance market in general that they will do moratoriums when there are risks that are too high for their comforts.

This simply means that they will either put a stop or take a break from providing flood insurance policies to a certain area that has higher risks. There's also a chance that you might not get to buy flood insurance from them once they decide to non-renew your policy.

What Really Matters

Understanding your insurance coverage from a homeowners insurance policy, renters insurance policy, water backup insurance, and flood insurance is the key to ensuring that you bounce back from any possible damages due to natural disasters or lack of maintenance. You want to get yourself a good insurance agent who can help you explain these coverages and how they differ.

If you have any questions about flood insurance, insurance coverages, or anything related to floods, click the link below to access our Flood Learning Center where we try to answer your questions on flood insurance and beyond.

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.