When most people think about flooding they normally think about areas like the coast. They don't think about inland areas like Birmingham Alabama, Huntsville Alabama, Hoover Alabama or even Montgomery Alabama. This is one reason why many times insurance agents, realtors, lenders, and property owners are not aware of the flood insurance options in Alabama.

In this blog we are going to particularly talk about private flood insurance in Alabama and everything you need to know about.

The majority of people in Alabama still think the only flood insurance option available in Alabama is through the National Flood Insurance Program.

However this simply is not the case. Private flood insurance and the National Flood Insurance Program are both available in Alabama. Private flood insurance has really made a push into Alabama in the last 10 years.

However before you start rushing to the private flood insurance market there are some things you need to know.

  1. Who qualifies?
  2. What does admitted and non admitted mean?
  3. What coverages are available?
  4. Pricing
  5. Claims process


So let's talk about  who qualifies for private flood insurance in Alabama?

Be Prepared sign with clouds and sky background

Almost any body can qualify for private flood insurance in Alabama except those that are on the severe repetitive loss property list.

This is a property FEMA has designated because of a certain number of flood losses within a certain time frame.

There are a few things that could disqualify you based on the private flood insurance company. For example some private flood insurance companies will not insure a property that has had any flood loss, then there are some that only restrict it within the last 5 years, and then there are some that restrict it to just none claim within the last 5 years.

Something else that could disqualify you for private flood insurance in Alabama is the type of loan you may have on a property?

FHA loans restrict flood insurance options to only the National flood insurance Program, so this is one thing that could disqualify you. While other loan types in Alabama do allow private flood insurance it still has to meet certain guidelines.

Loans Concept. Word on Folder Register of Card Index. Selective Focus.-1

In order for banks to accept private flood insurance it has to meet the U.S.C 402C. which is the private flood insurance standard of being the same as the National Flood Insurance Program.

The reason for this is because it's a different type of program.

Private flood insurance in Alabama is broken into two different categories. You have non admitted and admitted.

So whats the difference?

Admitted insurance companies are companies that are licensed to do business in a state. They have to follow certain state laws and consumers have certain protections if the company goes out of business.

Non admitted insurance companies are not licensed in a state but are still allowed to do business there. They do not have to follow the same state laws but do have other guidelines they have to follow. Consumers do not have protection if these companies go out of business. Non admitted companies can also charge different fees that admitted companies can not.

It's important to know as of 2020 Alabama does not have any admitted carriers for private flood insurance.

So what coverages are available?


Private Flood Insurance Coverages

Well this is where private flood insurance in Alabama can be very beneficial. Private flood insurance offers unique coverages on commercial and residential flood insurance in Alabama.

Let's look at residential flood insurance first. The National Flood Insurance Program only offers up to $250,000 on buildings and $100,000 on contents. Private flood insurance can go up into the millions on building coverage. They also offer additional living expenses so if your property floods then you would have a temporary place to stay. This can be really important if repairs take 3-6 months.

Now let's look at the commercial coverages. The National Flood Insurance Program only offers building coverage up to $500,000. As you can imagine this would not go very far on a commercial building. Private flood insurance also offers coverages into the millions here. One major thing that the National Flood Insurance Program does not offer is business interruption coverage. This is a critical coverage for a commercial flood insurance policy.

Let's look at an example of where you would use this coverage. Let's say that you own apartment complexes in Birmingham Alabama. Its been an usually wet few months and the Cahaba river starts to overflow causing water to enter the apartments.

Apartment building in Philadelphia, Pennsylvania.

Well residents can't live in these apartments until the repairs have been done.

Let's say that 30 units are damaged and you rent them for $1000 a unit. If it takes 3 months to repair them then thats $90,000 you could be out of pocket. However a private flood insurance policy could cover this expense. As you can imagine this could send some business owners into bankruptcy.

Now that we have a good understanding on the differences in coverage lets discuss pricing.



We hear from people everyday in the Birmingham and Huntsville Alabama area that all flood insurance is the same. While this technically is the case for a National Flood Insurance Program policy. This is not the case for private flood insurance. Each flood carrier looks at risk differently. The two things that most are looking at are the elevations of the building and the location to flood risk in the area. FEMA is using their outdated flood maps and private flood insurance companies are using different technologies.

Because of this its not unusual for private flood insurance in Alabama to be 40% cheaper than the National Flood Insurance Program.

So what about claims?


Private Flood Insurance Claims

We can talk about all the other stuff all day long. However at the end what matters is when you have a claim you are covered and its a smooth process. FEMA claims can take 6 months to a year to settle if it is a smooth process. What about private flood insurance claims?

We had a client in Centre Alabama that suffered a total flood loss in 2019 from the flooding. While this customers neighbors were still battling with FEMA after 6 months he had is private flood insurance claim settled within 60 days. Since it was a total loss they paid off the mortgage.

We had the exact same thing happen with a client in Nebraska where they settled within 60 days and everyone else was waiting on FEMA.

So before jumping into the private flood insurance market in Alabama it's important to ask the questions we have discussed today. This will help you understand the type of company you are dealing with and confident that the claims process will go smoothly.

So if you have questions about private flood insurance in Alabama then make sure to visit our website. You can also check out our daily flood education videos on our YouTube channel or Facebook page.


Contact Us


Chris Greene


Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation



Online real estate sites like Zillow and Realtor.com have had a major impact on the real estate market over the last 5 years. You can almost find out instantly what your house will be sold for, however there are some misleading things on these sites. Sometimes the square footage might be wrong, the year built, or even the foundation type.

As you can imagine these things could have a big impact on what you could sell your house for in Huntsville Alabama. Having the lowest home inventory in 20 years can also magnify this issue.

However these things could be having an even bigger impact on your flood insurance premiums.

Everybody uses these sites now from realtors to home buyers to insurance agents. It makes it very easy to get the information you need to do a home insurance quote or a flood insurance quote if you are an insurance agent.

You might even be a potential buyer using this information to get your flood insurance quote.

STOP right there that is the wrong way!


As we mentioned before these sites are not always 100% accurate. For example we were just reviewing a listing in Huntsville Alabama for potential home buyer where the property was in a special flood hazard area. We were reviewing everything on the home and noticed when it comes to flood insurance some things were different.

  1. Foundation type
  2. Year built
  3. Update details
  4. Estimated value

You see the North Alabama MLS and the online sites had the home listed with a basement, but when we reviewed it there was not a single side of the property that was underground. FEMA's definition of a basement is a property that has all sides of the home below grade.

When it comes to flood insurance this home was actually considered to be on a slab. Had this home been quoted with a basement it could have had some major exclusions for coverages on the first level as well as significantly higher flood premiums.

Now lets use the other example that confuses alot of people and that is when its listed as a basement when its really a crawlspace.

This mistake could have a significant difference on flood premiums. Sometimes the mistake is not caught for a few years. If you have a flood insurance policy through the National Flood Insurance Program they normally request pictures which can prevent this from happening. However if its a private flood insurance policy they may not request these documents and there is no getting this flood insurance premium back from previous years.

So how can updated details impact the property?

So say the site says the home was built in 1950 which makes it a pre firm structure but it was updated in 2004. It list many of the things that were updated but what it doesn't tell you is the home was torn down to the foundation and redone.

As a result FEMA no longer considers this a pre firm structure but instead it is a substantially improved structure. As a result the year built is considered to be 2004. Since the home is in a special flood hazard area an elevation certificate would be required if you decided to do a policy with the National Flood Insurance Program. The rating system could also be completely different since it is no longer a Pre Firm structure.

Estimated value might be one of the most common things that is off with these sites. Now it's always recommended that you reach out to a realtor so you can get accurate values of the market value of the home. Using the estimated value on these sites as an insurance agent can be very dangerous. Whether it is flood insurance or something else this could easily underinsure a property owner. Then what happens is when a claim occurs they may not get the coverage need to replace or repair the home.

This is one major complaint that property owners had in east Alabama on Weiss lake and Lake Logan Martin after the 2019 flooding event.

Many of these property owners either had the loan amount listed on the flood insurance or what they thought the homes value should be. The problem with alot of these sites is they use market value on these amounts and for flood insurance replacement cost is used.

So whats the difference?

Market value is the value someone thinks they could sell their home for.

Replacement cost is what it would actually take to rebuild the home.

As you can imagine when its a bad real estate market there could be a huge difference in these amounts.

So let's say that you bought that house on Lake Logan Martin in 2010 not long after the market crash. You got a great deal on it and got a great rate on the flood insurance.

It might not be as a good of a deal as you think. You might want to pull out that flood insurance policy in see what amount of coverage is listed on there.

I imagine you only have $75,000- $100,000 in coverage when you should have $150,000-$175,000 in coverage. You might not have that much coverage we recently had a client come to us that only had $85,000 in coverage on a 3000 square foot house. As you can imagine this $85,000 in coverage would not have gone very far on a 3000 square foot house.

So we have addressed some issues when using these online real estate sites. Remember while these tools can be great for getting information, you always want to verify this information with a licensed realtor.

So if you have questions about making sure your flood insurance policy is accurate or learning more about what flood insurance options in Huntsville Alabama are available then visit our website. You can also check out our daily flood education videos on our YouTube channel or Facebook page. If you are on the run then check out our daily podcast here.


Contact Us


Chris Greene


Chris Greene

President of The Flood Insurance Guru
M.S. in Emergency Management with a focus in Flood Mitigation