Flood insurance is what might be one of the most important coverages you can get nowadays. A single flood policy can provide flood protection for thousands of dollars. However, did you know that not only residential homes and commercial buildings can get flood insurance?

In this article, we want to talk about how you could protect your flood insurance premiums as a landlord, or apartment building owner, and make flood insurance easier for you, your property, and your renters.

Flood Insurance for Apartment Building Owners

When it comes to flood insurance as an apartment building owner, you want to make the most out of your investments. Considering how most of your properties will be one of the sources of your income, it's best to help them avoid getting ravaged by flooding. This will not only impact your property but also the potential customers you may have in the future.

So let's talk about the things you can do to make utilize your flood insurance best. We will talk about the following things:

• Blanket Flood Insurance Coverage
• Loss of Use
• Replacement Cost & Elevation of Structure

Blanket Coverage

First, it's important to know the type of flood insurance coverage you need to get for your property. This may be through individual/specific flood coverage or blanket flood coverage.

The difference between these two is that individual coverage is only specific to a single property. So the building and personal property coverage with your flood policy will only be applicable to a single structure. This is not really ideal if you have multiple properties.

On the other hand, you may be able to get a blanket flood insurance policy; which really eliminates most of the limits you will see on an individual flood policy alone.

Blanket insurance means that you may get the same flood insurance coverage for multiple properties with just a single policy. This means that flood coverage for flood damages may apply to more than one type of property at the same location or the same type of property at multiple locations.

It's important to note however that the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) generally don't offer blanket flood insurance coverage however you can still get one through other private flood insurance companies.

Loss of Use Coverage

Now, let's jump into one of the things that you should be looking to include with your flood insurance policy: loss of use coverage.

Loss of use is generally an additional coverage that you can get with flood insurance. The purpose of this coverage is to provide you with actual cash or any form of reimbursement for you as the property owner of a rental property.

When your property gets hit by flood, as the repairs are ongoing, you won't really have use of the property. With this coverage, instead of not being able to earn anything as the repairs are ongoing, the flood insurance policy may provide you with whatever potential income you are losing during that period.

Replacement Cost & Elevation of Structure

Last on our list is the replacement cost value of your property and why protecting it from flood damage can directly impact the profitability of your property as an apartment building owner.

Replacement cost is simply the amount or cost of the property's structure if you were to sell it on the market. For flood insurance, this is generally considered because the replacement cost will be the basis for your flood insurance rates. So if you have a higher or more expensive amount for the building, you may also start to see some form of an increase in your rates.

It's equally important to also consider the elevation of your property because this generally shifts your risk of flooding. An elevation of your property will also help show that you are at a reduced risk for flooding.

This is why despite elevation certificates being no longer required for flood insurance, it still is a helpful document in lowering your risk and sometimes even removing your property from a flood zone.

Protecting Your Premium Rates

When you start processing the purchase of flood insurance, it's best to consider these three things in order to protect your premium rates. This is really important especially if you have a building that sits in a high-risk area where the chance of flooding is not only high but also sometimes unpredictable.

As a property owner of apartment buildings, you may want to make the most out of your flood insurance coverage. For the federal flood insurance side of the market, you may start seeing a max of $500,000 on your building coverage.

Although the private flood insurance market has more flexibility with coverage amounts, meaning you can go further than $500,000 for your building coverage, this won't really guarantee that you can lock in on your premium rates.

One of the biggest risks of a flood-prone property is that you also lose interest and appeal to your potential customers. If people start to see that your property is a high-risk one when it comes to flooding and damages, renters might choose another option. This in turn will hurt the profitability of your property long-term.

If you are ready to take the next steps to get the right flood insurance coverage then there are three simple steps.

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

Got more flood insurance questions? Visit our Flood Learning Center below to know more:

Today, we want to answer one of the most asked questions ever since this new Risk Rating 2.0 program came into the picture when it comes to the National Flood Insurance Program (NFIP) and the Federal Emergency Management Agency (FEMA).

Will my rates double with the Risk Rating 2.0 update?

Risk Rating 2.0

When it comes to this new update, one of the things that people may think about and be haunted by asking if this new Risk Rating 2.0 program means that flood insurance rates across the board will double.

Before we dwell too much on that question, we want to address first what is going to happen with the Risk Rating 2.0.

Just because it says "2.0" doesn't mean that your rates will double. 2.0 simply pertains to the fact that this is a newer version of federal flood insurance. Think of it as an app in your phone updating from an old version to a new one; sometimes it even goes up to 7.0, but it doesn't really mean that the app will be seven times bigger.

This new program is deemed equity in action as it aims to provide the most accurate flood insurance rates by using each property's unique flood risks. The new Risk Rating 2.0 program will start to look at multiple flood risk variables or factors in order to finalize your rates and this way it hopes to make give everyone a transparent flood insurance pricing for each property owner when they pay.

With the flood risk variables kicking in, your property's going to get a final flood risk score that covers addresses your risks and how they contributed to calculating your rate. We'd like to put it simply as "the fingerprint of your flood risks".

These flood risk variables will cover multiple areas concerning your property and the nature of floods. One of the biggest changes is that this new program will only look at flood zones as a regulatory reference. This means that flood zones will no longer impact rates, but can still demand you to get flood insurance if you're in the special flood hazard area (SFHA).

Rate Changes with Risk Rating 2.0

The truth is when it comes to flood insurance policies and their respective flood insurance premium, Risk Rating 2.0 will can either cut your premium rates in half or create a rate increase that will double the price of flood insurance. All of this is dependent on your flood risk score.

The things that will determine your flood risk and flood insurance rates will cover both things from the legacy program and new things with the Risk Rating 2.0. We've put down a list of the things that are staying and the new kids in the block when in the federal flood insurance scene.

The remaining features are as follows:

• Zone designation in the flood insurance rate map (e.g. special flood hazard areas (SFHA) or preferred flood zones) however flood maps will only be used from a regulatory standpoint, not rating.
• Distance to water sources such as a river, creek, lake, or even the coastline
• Prior flood insurance claims or flood claims made with the property
• Policy assumption and grandfather rule

The new things that will come with the Risk Rating 2.0 are as follows:

• Types of floods. This can be either pluvial or the accumulated water due to rain, runoff of collected water that flows from higher areas, storm surge and coastal erosion, dam/levee damage or overflow, and even a combination of these things.
• Flood frequency. How often do these floods happen on your property or in your area?
• First-floor height and elevation of the structure. A new feature that determines your flood risk score is the distance between the ground (grade) from your first floor or the first habitable floor of your property.
• Flood Risk Mitigation Measures made on the property. Is the lowest floor above the base flood elevation? Are there enough flood openings to let floodwaters through?
• Replacement Cost. How much will it cost insurance companies to rebuild or repair your home when damaged?

Does this mean that higher-value homes will be the ones to double the cost of flood insurance since they will get annual premium increases and flood insurance policyholders with lower-value homes will be the only ones to pay half of their flood insurance?

If we really look at Risk Rating 2.0 closely, this will address each and every individual property's flood risk score. So the higher the risk of flooding within your property, the higher the increase you'll expect. Right now, we're currently seeing an estimate of 70% of the registered properties (both residential properties and commercial ones) will get an increase in flood insurance rates with the Risk Rating 2.0.

This 70% doesn't really contain solely higher-valued homes and the other 30% who might not see a price increase are lower-valued homes. This is a complete mix of the overall population across the country. It can really be hard to tell whether or not you're going to be one of the homeowners who will get their flood premiums cost cut in half since we're yet to see any impact of implementation from FEMA and the NFIP.

What is important to note here is that there will be places and properties that might even see a double-digit rate increase with their flood policies from FEMA and the NFIP.

That said, I think the best thing to really ask is how well you're protected because we're already seeing that floods can happen anywhere at any given time. Even low-risk flood areas like New York City, Atlanta, and Waverly saw huge flood damage even though they're well outside the flood-prone areas.

Make sure that you are protected at all times and that you also get to protect your property from floodwaters. If you have any questions on Risk Rating 2.0, how to determine your flood risk score or anything about floods and flood insurance, reach out to us by clicking below.

We also encourage that you visit our Flood Learning Center where we try to answer your questions on flood insurance.

Remember, we have an educational background in flood mitigation which lets up help you understand the level of risk that you have when it comes to flooding, your flood insurance, and protecting 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.