One of the biggest things that really impact flood insurance is flood zones. Aside from being a form of measurement of how the property is going to flood, this is also a big consideration when it comes to flood insurance.

 

In this blog, we want to talk about one of the most common flood zones you'll see in flood insurance rate maps (FIRMs), the flood zone AE and discuss the 4 things you need to know about this zone.

Flood Zones

Flooding is one of the biggest and most common natural disasters that occur in the United States. It's estimated that even just an inch of water can cause around $25,000 in property damage.

One of the key things that can tell your risk of flooding and your property's chance of flooding is its flood zone. Historically, with the National Flood Insurance Program (NFIP), these flood zones are one of the bases for assessing your flood insurance premiums.

However, since we moved into a new Risk Rating 2.0 program, flood zones became more of a regulatory measurement. This simply means that flood zones are only used now to see whether or not you're required to carry a flood policy with your property.

Flood zone AE is one of the common high-risk flood zones in the United States. In order to understand this high-risk zone, we will give you four things that you need to know by answering the following questions:

• Is Flood Zone AE in the 100-Year Floodplain?
• Is flood zone AE in a special flood hazard area (SFHA)?
• Is flood insurance required in Flood Zone AE?
• How does Flood Zone AE impact flood insurance rates?

So, let's answer these questions, but first, let's determine...

What is Flood Zone AE?

Flood zone AE is also known as a special flood hazard area since this is generally a zone where flood risks are very high and flooding can happen once every 100 years. Flood zone AE also has its base flood elevation determined through flood maps. 

This is why it's commonly known as well as the 100-year flood zone. This is strictly based on research on probability however this doesn't really reflect how disasters work so it still differs. The flood zone is also known to have a 1% chance of flooding per year.

 

Is Flood Zone AE in the 100-Year Floodplain?

Being in the 100-year flood area or floodplain, Flood Zone AE presents around a 26% chance of flooding during a 30-year mortgage. This generally entails the risk for flooding on the property during that period. Generally, you will see properties in flood zone AE are close to a body of water.

 

Is Flood Zone AE in SFHA?

With the previous item answered, this easily puts Flood Zone AE in the special flood hazard areas (SFHA).

Special Flood Hazard Areas (SFHA) generally are areas that can experience a different type of floods. The Federal Emergency Management Agency (FEMA) would also qualify a flood zone designation as being in the SFHA if it experiences special floods, mudflows, or floods that are due to erosion hazards.

Is Flood Insurance Required?

Due to the flood zone being a high-risk area, properties that are mapped into flood zone AE are generally required to carry flood insurance.

This means that if your home or commercial building is sitting on flood zone AE, your mortgage will require you to get flood coverage for the property against flood damage. This is to make sure that the property's value, structure, and integrity is protected and preserved in the event of a flood disaster.

These zones are determined by the flood insurance rate map (FIRM) to see if the structures of the properties can keep up with the possible flood risk in the area. It's important that the flood map uses the data on the chance of flooding in the area, the base flood elevation of the community or the property, and as mentioned before the probability of a flood in the event that there's heavy rainfall or somewhere along those lines.

So, when it comes to Flood Zone AE, you can expect that a mandatory flood insurance purchase will be expected for property owners who are mapped into this high-risk flood area. This may come either from your mortgage lender or through FEMA itself.

 

Flood Zone AE & Premium Rates

To answer the question: How does flood zone AE impact flood insurance rates, we will have to look at both the past and the current state of the flood insurance industry.

Traditionally, with the NFIP and FEMA, being in a flood zone AE has a direct impact to flood insurance costs. This is because, historically, federal flood insurance would use flood zones as a basis for flood insurance premiums which means that generally, some properties with minimal flood hazard will see cheaper flood insurance rates compared to flood zone AE.

However, things have changed with NFIP's Risk Rating 2.0 which only uses these zones as a measurement of whether or not a property should have flood insurance. So, flood zones no longer have an impact on rates. The same can be said for the private flood insurance market.

It's important to remember, however, that there are other things that your flood insurance policy costs will be based on such as distance to water, type of flood, frequency of flooding, the elevation of the property, and many more.

So, those are the four things you should know about flood zone AE in the current flood insurance market. If you have questions regarding flood zones, flood insurance, or anything flood-related, click below to access our Flood Learning Center to get your answers.

Ready to start simplifying your flood insurance? Just follow these three simple steps:

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

Alabama has been always front and center when it comes to concerns of flooding. It's no surprise then that one of the biggest worries of property owners is their flood risks and equally where they land when it comes to flood maps.

In this blog, let's talk about the different flood zones in Alabama. We also want to discuss what areas are in a required flood zone and what areas aren't in a required flood zone.

Flooding in Alabama

Just in the last 2 to 3 years, the number of flood risks in the state of Alabama has drastically increased compared to the last 10 to 15 years. This is very much evident in how common it became for some areas in the state that receive 10 inches of rain in a 12-hour period. This immediately shows how higher the chance of flooding is becoming for most of these areas which become flood-prone. This is also why some areas find it uncommon to see at least 4 inches of rain just within 2 hours.

About a week ago, Limestone County in Alabama was immediately terrorized with flash floods to a point where Chapman Hollow Road at Alabama 99 had to be closed by Commissioner Townsend because due to all of the water that was over the road. This is after Limestone County got about 1.49 inches to 3.20 inches of rain last Tuesday.

This type of scenario shows how much floods have changed in the last few years in Alabama, and it warrants a proper explanation of how flood zones have a hand in this concern.

Understanding Flood Zones in Alabama

The first thing you need to know about flood zones in Alabama is that we generally separate these between low-risk flood zones and high-risk flood zones. Historically, low-risk flood zones were also called preferred risk zones, but as we move out of using flood zones as a basis for flood insurance premiums due to the Risk Rating 2.0, this isn't applicable anymore.

When we talk about low-risk flood zones, we mostly look at flood zone X. Before we move forward in discussing these low-risk zones, it's important to always remember that there's no such thing as "not in a flood zone". Each property across the United States is in a flood zone. It's crucial to understand that "not in a flood zone" are properties that are simply mapped into a low-risk zone.

Flood Zone X was called a preferred zone because generally properties in this type of flood zone have a lower risk of flooding and don't really have a requirement to carry flood insurance. However, it's becoming more of a myth now that floods don't happen in Flood Zone X as we're seeing more common flash flooding in Alabama.

On the other hand, you also have these high-risk zones which are also called the special flood hazard area (SFHA) that generally indicate an increased risk for flooding in that specific location. Flood Zone A is one of the most common high-risk zones you'll see in Alabama. Generally, when you start getting mapped into these zones, mortgage companies expect that properties in flood zone A should have flood insurance policies.

Flood Zone A is a high-risk zone due to the zone not having a determined base flood elevation. Generally, if you want to lower your flood insurance rates or be removed from being mapped into a high-risk zone like Flood Zone A, you will have to use an elevation certificate or a letter of map amendment. Generally, properties being moved into or are already mapped into these zones see a slight increase in their premium rates and flood risk.

Lastly, we have the Flood Zone AE which is somewhat similar to flood zone A however for these zones, the base flood elevation has been determined. This zone is also called the 100-year floodplain and has about 30% of flooding in a 26-year mortgage. Just like the previous flood zone, your mortgage lender will most likely require you to carry a flood policy if you're mapped into a Flood Zone AE.

Flood Zone AE's flood premiums are not determined by a single measurement alone. Most insurance companies, and even the National Flood Insurance Program (NFIP), now look into different flood variables such as the structure of your home, the type of foundation of your home, how much flood you get, what type of floods you get, and how much flood claims were made in a Flood Zone AE property historically.

Finding Your Flood Zone

When it comes to flood zones, generally you have to follow whatever's being indicated by your current flood insurance rate map (FIRM) from floodplain administrator. This generally means that if you're moving deeper into the SFHA, then you will have to adjust your expectations not just with the number of floods you will get, but also with your flood insurance rates. There's a directly proportional relationship between flood zones and flood risks after all.

However, this doesn't really mean that you will have to accept whatever expensive flood insurance premiums just because you're in a high-risk flood zone. In Alabama, a lot of new insurance companies are coming in to support the state when it comes to flood mitigation and protecting people from flood damage. This means that there are a lot of options to go through now.

Finding your flood zone in Alabama doesn't just mean knowing the flood zone you have, but how you can manage this better especially when it comes to the cost of flood insurance. Sometimes, you get into the wrong flood zone or maybe you want to remove your property from flood zones. Either way, we want to help you go deeper into understanding how the costs of flood insurance in Alabama are determined.

Flood Variables

Let's talk about positive elevations first and how they can have a big impact. The further your home is above the base flood elevation the better the rate is going to be. If all the elevations of your home are above the base flood elevation your home might even qualify for a letter of map amendment. This means that your property might be removed from the high-risk flood zone and placed in low-risk flood zones causing a big improvement to property values.

When it comes to the impact of negative elevations. As mentioned above basements can cause a home to have an extreme negative elevation. The higher the negative elevation home has the higher probability of a flood occurring. This can create a double-edged sword because the NFIP rates can be through the roof sometimes exceeding $10,000 a year for noncoastal properties. However, the other problem is the higher the negative elevation the less likely it is that a private insurance carrier will offer coverage on a property.

Flood losses also can have a major impact on a property. It could even stop a property from selling if severe enough. Generally, when one flood loss occurs you would lose the preferred rating with the NFIP if you had one. Having a flood loss can also eliminate most of the private flood insurance options as most will not insure a property that has had a loss. However, when the second loss and paid claim occur is when disaster can strike.

This can turn a property into a severe repetitive loss (SRL) property which has to follow certain mitigation guidelines in order to get insurance through the NFIP and private flood insurance is not available on these types of properties. This is why you should really review things closely before filing a flood insurance claim.

Flood insurance is now more important than ever in Alabama especially as we prepare for the sudden shift when it comes to rainfall amounts as we move into the Spring season.

If you have questions on flood insurance, we have a Flood Learning Center dedicated to answering all your questions and more when it comes to flood insurance. Click below to go to our Flood Learning Center page. 

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.

A lot of changes had happened with flood insurance across the country. Kickstarted by the update to federal flood insurance with Risk Rating 2.0, a lot of things also need to be addressed when it comes to people who are buying and selling properties.

Today's blog focuses more on the things you should know as a realtor in Golden Isles and Saint Simon Islands, Georgia when it comes to flood insurance.

CBRA Zone

One of the most important things we need to address is the overall geolocation of Saint Simons Island, Georgia, and why it's important for realtors to know why being in the coastal zones is important when it comes to flood insurance.

The Coastal Barrier Resources Act (CBRA) is generally the federal government's move in order to ensure that our coastal barriers are developed and modified. Considering that the properties in Saint Simons Island are basically within reach of the coasts of the Atlantic Ocean, the CBRA is implemented in the area.

Being in a coastal area like this will no doubt see its structures flooded due to storm surge, coastal erosion, or worst tsunamis. With the risk of flooding this high, you might be doubting if flood insurance is available for property owners of Golden Isles.

Is Flood Insurance Available?

The good news for realtors is that you can still sell houses in Golden Isles and secure that flood policy for your customer to protect both buildings and personal property however, there's a catch. The thing is, properties that are already built or under construction are the only ones that can get flood insurance through the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP). It's important to mention that this is only applicable if the property itself is prior to the prohibition date of the Coastal Barrier Resources System (CBRS).

As a realtor, it's also important to note if there are substantial improvements that are "over 50 percent of the structure's market value" made for the coastal home, flood insurance will no longer be available from FEMA and the NFIP. 

Changing Flood Zones

We've mentioned in the introduction how Risk Rating 2.0 is changing the flood insurance scene. One of its biggest impacts is moving out of using flood zones as a basis for flood insurance rates.

You might have encountered a lot of potential buyers rejecting to buy a house in Saint Simons Island because it's basically flood-prone and it's located in a high-risk flood zone. Generally, these concerns lean more towards homeowners being scared off by potential flood insurance rates skyrocketing.

The good news you can tell as a realtor is that being in a coastal flood zone, like Flood Zone V, won't really impact flood insurance premiums with the Risk Rating 2.0 in federal flood insurance. This is one thorn you can snip off their sides since basically all the flood premiums' would be concerned of are things like how much flood happens in the area, what type of floods impact the property, are there flood mitigations made in the property, and how it's built like the property's foundation to name a few.

So it doesn't really matter anymore if you're selling a property that's in a high-risk flood zone since it won't these flood zones no longer have a bearing on overall flood insurance costs. It's important to note, however, that a flood insurance policy will be required by the buyer's mortgage for any/all properties that are located in a high-risk flood zone or the special flood hazard area (SFHA).

Benefits of Private Flood Insurance

Lastly, we've been covering most of these flood insurance tips for federal flood insurance, so it's due time we move to the other flood insurance option. It's not always that FEMA and NFIP are your only way to get flood insurance.

Private flood insurance has been known for providing a more convenient flood insurance policy for homeowners and business owners alike. This is mostly owed to the fact that private flood generally has cheaper flood insurance premiums.

It's also important to note that even before there was a Risk Rating 2.0 update, most private insurance companies base their rates or premiums for flood insurance on what's called a flood risk score. This flood risk score looks into multiple factors and determines the overall risk of flooding for the specific property.

READ: Risk Rating 2.0 Georgia

This is something that every realtor should know by heart because once your buyer starts shying away after seeing a quote for flood insurance from FEMA and NFIP, you can guide them to their other flood insurance option.

Another benefit of going through private flood insurance is its coverages. When you go to federal flood insurance and the NFIP, you'll have to get coverage for at least 80% of your property. This insurance coverage from NFIP also maxes out on $250,000 for residential building coverage and can go up to $500,000 for commercial properties. Both residential and commercial properties only get $100,000 in contents or personal property coverages.

The same can't be said for private flood insurance since most of these carriers will allow you to find more flexibility for coverages. So if the property is less than $250,000, you can still have it fully covered and have your customer lower their premiums. On the other hand, this also means that there are no coverage limits, so properties that are valued at more than $250,000 (i.e. $350,000) will get full coverage.

All of these benefits can easily be provided to the property within 3 to 14 days which is a drastic difference between the strict 30-day wait period of NFIP.

As a realtor in Glynn County, Georgia, this flood insurance information is something that you should know since it may directly impact your sales. It's important to note that at least 72.8% of Glynn County's residents will see an increase in their flood insurance rates with FEMA and NFIP.

So if you have any questions on flood insurance, click below to access our Flood Learning Center.

You can also click the picture below to call us for your flood insurance concerns.

Remember, we have an educational background in flood mitigation which lets us help you understand flood risks, flood insurance, and how these impact the real estate industry.

Alabama is no stranger to flooding. Be this due to consistent rainfall to hurricanes making landfall near the state, almost throughout every year, Alabama will be a victim of this type of natural disaster.

Today, we want to do a deep dive into why flooding is very common in the state and discuss the three most common flood zones in The Heart of Dixie state.

Lookback on Alabama Floods

The state is no stranger to floods especially due to flash flooding. Most of the counties in the state face flood as one of the biggest challenges from heavy rains to tropical storms passing by.

Despite having only one named storm in the last quarter of this year, it doesn't mean everything will be calm. We're still seeing a lot of rainfall and persistent precipitations across the country. In most cases, these conditions are enough to cause enough flooding and damage to multiple areas.

Take note, this is without a tropical storm present and at the most extreme caused by monsoons. Why is this happening you might ask?

We can owe it to what's called the La Niña. La Niña is a "cold event" wherein trade winds are stronger than usual which pushes more warm water toward Asia. Being the exact opposite of El Niño which is commonly known as the "heat event" that leads to week-to-month long droughts in South America and California, La Niña is a mixed bag of weather conditions that are very unpredictable and usually exceed the expectations.

This generally causes some areas of the United States to be very dry while some get very wet. To give an example, 80% of Stanislaus County in California is experiencing very extreme to exceptional drought hence the "very dry" conditions. Add this to the already dried-up ecosystem due to the wildfires, it's no question why the drought continues in the state. However, it's equally important to note that these types of events may just be scratching the surface when it comes to the dangers it presents to locals.

On the other hand, if we look at areas like Washington, a lot of atmospheric river impacts are being felt due to La Niña hence causing floods in the area up to the northwestern regions even in British Columbia. We've also seen how the shift from having warm surface water to a much colder one impacts the weather in areas like Northern California. The northern part of the state recently had to face devastating damages due to atmospheric rivers causing an extreme rain event in the area.

These are just a few of the examples we're seeing in the past few weeks however this doesn't mean that everything ends there. We can still expect more effects of the "small girl" as we end the year and go through the winter season.

Most Common Zones in Alabama

There are three most common flood zones we see the cover of the households in Alabama, these are Flood Zone X, Flood Zone A, and Flood Zone AE.

Other than the letters you might be wondering how these flood zones differ, so we'll discuss that

Flood Zone X

If your property is "not in a flood zone" then you're most likely to be in a flood zone X. Generally this zone has the lowest flood risk due to its relative distance to floodplains where flooding commonly starts. This simply means that flood insurance generally isn't required since the probability of a flood or risk of flooding, and impact a building or property in such zones is much lower than other flood zones.

Keep in mind that we're talking about a low-risk zone and not a no-risk zone. This is generally due to flash floods being more commonly experienced by flood zone X which causes significant flood insurance losses due to the damages.

Some mortgage and/or insurance carriers would also call these preferred flood zones. This is called a preferred zone since it has more favorable rates for the homeowner and risks for the insurance carrier. Even with FEMA, being in a low-risk zone brings a lot of good things because Flood Zone X has lower rates even in flood-prone Alabama. 

As we move into Risk Rating 2.0 where flood zones don't impact flood insurance rates, if your property sits on a Flood Zone X, you won't be required to carry flood insurance. However, it's important to remember that 30% of flood insurance claims do come from the homes in Flood Zone X.

Flood Zone A

Let's say you move into someplace else and the property or building is marked as moderate to high-risk flood zones.  Flood insurance is mandatory in areas under Flood Zone A on a property(s) with a mortgage or any additional interests in the property or building.

Generally, this zone falls outside of the preferred zones due to higher changes and flood risk overall. In FEMA's legacy program, this is where you'd start seeing some significant increase in the rates of your flood insurance policy. 

Another important thing you should remember about Flood Zone A is that its base flood elevation isn't determined yet many times. This makes it a challenge for flood zone changes and flood maps since there's no assurance where the base flood elevation starts. You might wake up one day with your kid's teddy bear soaked under 3-feet of floodwater... or maybe not.

 

In this case, do keep in mind that when someone tells you to give your house an elevation certificate or you need flood vents for your home, you should always think carefully multiple times if you're standing on Flood Zone A; you wouldn't want your wallet drained of money.

In regards to Risk Rating 2.0, flood zone A simply means that you will be required by your mortgage or FEMA to carry flood insurance on your property. However, being in a higher-risk zone will no longer cause an increase or any impact on your premium rates.

Flood Zone AE

Lastly, the area where lifeboats should also be considered a necessity. All jokes aside, this zone has the highest risk when it comes to flood zones outside of the coasts and is also known as a 100-year flood zone.  Since Flood Zone AE has a 0.2% to 1%  flood threat at any given month and/or year as it's getting closer to the coast.

Unlike the previous high-risk zone, most properties in the AE zone have determined base flood zones. This is also why it's a higher-risk zone compared to the A zone. Due to this, FEMA and other floodplain management agree that certain conditions can be enough to cause small floods, flash flooding, or widespread floods in that area.

Like Flood Zone A, this zone also requires and mandates that a property must have flood insurance in place especially when there's a mortgage and/or any additional interests.

You don't have to worry since you have options in getting your flood insurance to secure your property values: the National Flood Insurance Program (NFIP) or through the private market (private flood insurance). 

Not being aware that you're moving into a special flood hazard area can cause an immeasurable headache for your bank as flood insurance will be required no matter what, and when someone tells you to give your house an elevation certificate, you should probably consider getting one with some flood vents if possible as this can help lower your rates even in Risk Rating 2.0.

Despite removing flood zones as a basis of rating in Risk Rating 2.0, flood mitigations like installing flood vents, securing elevation certificates, elevating your home, and other mitigation efforts are appreciated and will bring you enough decrease to make that FEMA rating easier to manage.

Flood Insurance Guru: Alabama

For this part, we really want to share our experiences serving homeowners and business owners alike when it comes to the residential or commercial properties they want to protect from flood damage and flood loss.

Looking at our data over at Flood Insurance Guru, about 25% of the flood policies we were able to handle in Alabama are currently zoned in Flood Zone X. However, considering that there is impactful development when it comes to the behavior of water and frequency of runoff and flash floods, even low-risk zones aren't really that safe from flooding.

On the other hand, about 21.2% of the policies we have for Alabama are in Flood Zone A. This can be very alarming, if this number rings true to all properties in the state, as homeowners and floodplain management don't really have a clear insight when it comes to the base flood elevation for at least 20% of the properties across the state.

Lastly, in our database for the customers, we have from Alabama. At least 53.7% are mapped into Flood Zone AE. When it comes to floods, this means that more than half of the properties in Alabama have identified base flood elevation and also are more flood-prone due to possible floodplain devolvement.

As you can see, most of the properties in Alabama are in a flood zone. Regardless of being in a Flood Zone X, A, or AE, properties will still get flooded. Basically, saying that a house is "not in a flood zone" is a myth. We want to raise awareness for these types of things especially since flood insurance is something that you really don't have included in any other insurance.

If you have questions on your flood zone in Alabama,  what are your flood insurance options in the state, or anything related to flood and insurance, click the links below to reach us. You can also access our Flood Learning Center by clicking its graphic below.

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

A lot of things will be changing once the new national flood insurance program kicks in next month. This will impact mostly rating as the new Risk Rating 2.0 from the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) aims to provide a more accurate representation of flood risks when it comes to flood insurance premiums.

Today, we want to talk about the impacts of this new program and will it stop property owners from buying a  flood insurance policy for their homes even in the low-risk zones?

NFIP Risk Rating 2.0

The new program from FEMA and the National Flood Insurance Program (NFIP) is long-awaited and long overdue. It's been 30 years since FEMA last made an update this big. Let's do a quick recap of what's changing with federal flood insurance in order to better discuss how this will impact the participating communities across the United States.

The Risk Rating 2.0 will mostly impact the rating structure within the National Flood Insurance Program (NFIP). This is because flood zones will move into a regulatory force that comes into play with flood insurance instead of directly impacting the rates.

Here are the old and new things coming into the picture when it comes to how you're rated. All in all, this will be called the flood risk score.

The remaining features are as follows:

• Zone designation in the flood maps (e.g. special flood hazard areas (SFHA) or preferred flood zones) however flood insurance rate maps will only be used from a regulatory standpoint, not rating.
• Distance to a body of water such as a river, 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 flooding that your property experience. This can be either pluvial or the accumulated water due to rain, runoff of collected water that flows from higher areas; coastal which are storm surge or coastal erosion; fluvial or river floods, or sometimes a combination of these.
• 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?

It's important to emphasize that the Risk Rating 2.0 will show different rates per household, and this new program is expected to cause an increase for most policyholders since we'll be able to see the risk of flooding on our property.

Impacts on Low-Risk Zones

When it comes to flood insurance, it's no secret that when you fall into a high-risk flood zone or high-risk area, your rates can really blow of the roof regardless if you're getting it from FEMA or the private insurers. However, once the Risk Rating 2.0 starts, a lot of properties in low-risk areas will also see a higher amount when it comes to their overall premium.

Since the risk of flood damage is very detailed, we can also expect these low-risk areas to get higher rates to match the flood coverage they will get from Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

The rates for these flood policies in low-risk zones will also be relatively more expensive compared to the previous program although it would retain the same building coverage and contents coverage. This also directly increases the annual premium from FEMA.

This type of change in the industry is sure to scare a lot of new property owners and new flood insurance policyholders. A good portion of the population might even avoid getting flood insurance at the expense of their security against flood water just because it's a huge burden for their wallets.

The Big Problem

It's normal to see that people will start shying away from buying flood insurance since the rates and premiums from FEMA and the NFIP will get an increase. However, the big problem here is that a lot of people from property owners, agents, and mortgage lenders don't really look at their options.

The truth is that floods don't really stop at a flood zone, so even in low-risk areas, you can still get the same flood damage or chance of flooding with high-risk zones. This is especially true in seasons like we have now where a lot of hurricanes happen. Last year, the Federal Emergency Management Agency (FEMA) found out that at least 25% of the flood insurance claims come from properties that are in low-risk flood zones.

You really don't need to be anxious about flood insurance rates and second-guess whether or not you should buy one. You should since we're talking about protection from flooding for your home and everything inside of it.

If you're one of the people who are thinking of not getting a policy due to the higher cost of flood insurance, you should know that there's always an option outside of federal flood insurance. You see, a lot of homeowners don't really know that there are dozens of private insurance companies which offer the same protection, coverage, or most times, even more, when it comes to flood insurance.

Going Private

We've talked a lot about the comparison between federal flood insurance and private flood insurance. We've created a lot of content solely focused on how these fair up in the flood insurance market from claims, coverage, pros, and cons. For this one, we want to focus on why it's best to have a second option through a private company when it comes to flood insurance.

Since flood insurance is a separate policy from your standard homeowner's insurance policy, most of the time, and depending on your loan type, your mortgage lender will allow you to choose where to get flood insurance. This can really be a big deal especially for those in high-risk flood areas like flood zone A where flood insurance will be required with the property.

READ: The Rematch: NFIP 2.0 vs Private Flood

Private flood insurance can also have your back when it comes to building coverage and contents coverage. Most of the private flood insurance companies would also offer additional coverages like replacement costs, additional living expenses, or loss of use.

The great thing about private flood is that it costs significantly cheaper with more flexible coverage compared to federal flood insurance. This is that "get more, pay less" aspect that really helps a lot of homeowners get protected even when they're in a flood-prone area.

Simply put, there are no coverage limits with private flood hence you can get more than $250,000 for your house and more than $100,000 in flood insurance coverage for your personal property or contents within that building.

Other than the flood insurance cost, you also have a better and shorter waiting period. The NFIP can have your policy take effect on your house after the 30-day waiting period from the date of the flood insurance purchase whereas private carriers can get your policy to take effect on the insured building within 5 to 14 days maximum.

The Real Threat

We understand that seeing standard flood insurance policy rates go high can really scare anyone. We're currently going through a pandemic still and a lot of expenses are needed. However, it's important to keep in mind that the real threat doesn't fall within the policy jacket or its costs. The real threat is when that water starts inundating your house.

It's always best to make sure that you're protected through flood insurance.

If you have any questions on how to buy flood insurance from the private market, the NFIP Risk Rating 2.0 impacts, or anything about flood insurance, click below to reach us.

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