The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to South Carolina and how they can impact your flood insurance in the future.

The Flood Insurance Guru | South Carolina: New Federal Flood Insurance Risk Rating 2.0

South Carolina, the Palmetto State, has been through a lot of flood events throughout history. This is no surprise considering that the state has a relatively big portion of it on the Atlantic coast. Just looking at the early parts of June, we've seen parts of the state flooded due to thunderstorms dumping torrential rain on the state. The rainfall went up to 4.4 inches in some areas like Charleston causing flood damage and power outages. This event is just a few days shy of the flooding that hit Goose Creek.

You also want to consider things like homeowners in Hilton Head Island and other coastal residents which generally receive a lot of the impacts in hurricane season since storms, thunderstorms, and low-pressure systems. These things can easily create multiple types of flood risk in these communities as it contributes to creating storm surge, runoff, or river overflows.

When things like this are constantly threatening your safety, you want to make sure that you get the best deal when it comes to protecting yourself from these flood risks. Today, we want to unpack the changes coming to the National Flood Insurance Program (NFIP) with the Risk Rating 2.0 and how it can impact flood insurance in South Carolina moving forward.

The Risk Rating 2.0 will start on October 1, 2021.

The NFIP 2.0

The Flood Insurance Guru | South Carolina: New Federal Flood Insurance Risk Rating 2.0

The Risk Rating 2.0, or commonly known as NFIP 2.0 as well, is more of a move of equity. This update on the federal flood insurance program itself will allow you to no longer pay more than your fair share when it comes to premiums as this would now be based on the value of your property or home starting this October. 

This doesn't mean that an expensive property or higher-valued homes are the only ones to get rate increases with their flood insurance rates or flood insurance premiums, and lower-valued homes will see their rates go down. Property values aren't the only things that flood insurers look into when assessing whether or not your premium increases or decreases. You also want to look at:

  • Substantial flood risk and flood frequencies in these communities
  • History of flood loss and flood damage on the property
  • History and number of flood claims made in the last 10 years
  • Property's designation in flood zone maps A.K.A. flood maps. Is it in a high-risk flood zone or a low-risk flood zone?
  • Mitigation efforts made on the property. Does it have enough flood openings? Is the lowest floor above the base flood elevation?

As you can see, insuring your building, be it a residential property or a commercial building listed, will have a lot of things to be considered when writing your flood insurance policies. We highly recommend that you don't solely rely on flood insurance companies, regardless if it's the federal government or private insurance companies, to determine this for you. It's best to know these things as well, so you have a high level of understanding of the actual flood risks you're facing.

When it comes to the rate changes happening across the country, you're going to see these colors in ranges which represent these changes with flood insurance rates from FEMA. Now, each of these colors represents the good, the bad, and the ugly changes coming to each state.

The Flood Insurance Guru | South Carolina: New Federal Flood Insurance Risk Rating 2.0

The Good

First, let's start this off with the good things coming to residents of South Carolina once the Risk Rating 2.0 starts to kick in. We'll have this shown as the green portion of the graph.

We're talking about 26% or 53,215 policies FEMA has in force being impacted by this good change. This change will bring you a decrease in your federal flood insurance rates starting this October or when you adopt these new ratings from FEMA.

The decrease will be up to more than $100 (>$1200 per year) and can immediately take effect once you got everything covered with your flood insurance with FEMA. This can really help a lot of people especially if you're paying for expensive FEMA flood policies or properties mapped into that Flood Zone V or the coastal flood zone.

The Bad

Now, if there's good news, you can expect to also have bad news with these changes. This time around, we'll be showing this as the blue portion of the graph.

As you'll be able to see, this bad change will impact the largest number of policies in the state; covering a whopping 65% or 137,604 of the policies in South Carolina. This will be bad for those impacted since you're going to start seeing a slight increase in flood insurance rates with FEMA.

The increase will range from $0 to $10 per month ($0 - $120 per year) for those in that blue portion. This means that you may not experience any change with your flood insurance once the Risk Rating 2.0 starts or you can get up to a $10 per month increase on your rates.

The Ugly

Lastly, let's talk about the ugly changes which will impact a total of 9% of the policies in the state. Now, we'll show these as the pink and grey portions which are going to get you still an increase however this time around, the grey portion will be a much uglier change for those impacted.

The pink portion will cover 6% or 12,469 policies in South Carolina. This will get you an increase ranging from $10 to $20 per month ($120 - $240 per year). Now, this changes up the rates since regardless of where you fall in that range, you're still going to pay for higher rates thus premiums when the Risk Rating 2.0 starts to take effect.

The grey portion will be covering the other 3% or 5,276 of the policies in the Palmetto State. This is the uglier change because the increase will be more than $20 per month (>$240 per year) for those impacted. Generally, this could also mean that you might even start seeing that $100 per month increase on your FEMA flood insurance rates. This increase can really hurt a lot of people especially those who are in a high-risk flood zone or special flood hazard area (SFHA).

You can see the graph of these changes here:

The Flood Insurance Guru | South Carolina: New Federal Flood Insurance Risk Rating 2.0

When Will It Happen?

Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date. 

On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.

So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change. 

If you have questions on these upcoming changes, what are your flood insurance options in South Carolina, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.

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

The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to Michigan and how they can impact your flood insurance in the future.

The Flood Insurance Guru | Michigan Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

When we talk about the state of Michigan, we have to acknowledge its beautiful lakes hence the nickname Great Lake State. Despite this feat, it's important to note that being surrounded by bodies of water like these is bound to cause some major concerns when it comes to both flood risk and flood insurance.

A homeowner who is close to these bodies of water is also facing a lot higher flood risk due since there's a high chance that when there's heavy rainfall due to a storm, these areas will overflow.

Today, we're going to talk about the good, the bad, and the ugly changes coming to Michigan and its residents with the upcoming FEMA and National Flood Insurance Program's (NFIP) Risk Rating 2.0.

This change is bound to happen on October 1st, 2021.

The NFIP 2.0

The Risk Rating 2.0, or commonly known as NFIP 2.0 as well, is more of a move of equity. This update on the federal flood insurance program itself will allow you to no longer pay more than your fair share when it comes to premiums as this would now be based on the value of your property or home starting this October. 

The Flood Insurance Guru | Michigan Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

When it comes to the rate changes happening across the country, you're going to see these colors in ranges which represent these changes with flood insurance rates from FEMA. Now, each of these colors represents the good, the bad, and the ugly changes coming to each state.

The Flood Insurance Guru | Michigan Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

The Good

Let's start with the good change coming to locals of the Great Lake State itself. Now, this can be very surprising considering that FEMA's ruling on flood insurance rates is based on the risks of your property of flooding.

We'll show this change as the green slice and good news for the locals, there will be a decrease in flood insurance rates for 54% or 11,1120 which takes the biggest chunk out of the active FEMA policies in the state. 

The decrease will be more than $100 ($1200 per year) and will be an immediate one for these residents. Considering that in these areas — where most properties sit on that Flood Zone A or AE — residents face expensive federal flood insurance, this decrease will really help those affected.

The Bad

Now, let's talk about the blue slice which takes another big portion of the FEMA policies in Michigan. This represents a bad change because those affected will get an increase in their flood insurance rates starting in October.

About 42% or 8,436 policies will experience this change on their flood insurance rates once the Risk Rating 2.0 takes effect. The increase will start at $0 up to $10 maximum per month ($0 - $120 per year). This could mean that there won't be any change to your flood insurance rates or you might start to get that increase of up to $10 per month depending on the value of your property.

The Ugly

Lastly, let's go over the last slices you'll see with these changes: the pink and grey slices. Both of these will still cause an increase in rates, but to a different degree hence why we call it the ugly change.

The pink slice will impact 3% or 623 policies in Michigan. This means that these residents will get that increase from $10 to $20 per month ($120 - $240 per year). If we were to consider that the average federal flood insurance premium in the state is currently at $1100, you're going to have to deal with that extra $200 added to this once the NFIP 2.0 kicks in.

The grey slice, on the other hand, is what we consider the uglier change between the two because of the drastic increase it's going to bring with it. This will impact 1% or 302 FEMA policies in Michigan. Now, this one really packs a punch and can blow your flood insurance costs out of the water.

The increase for this 1% will be more than $20 per month (>$240 per year). This means that you might even experience an increase to your rates of more than $100 per month depending on your property's value.

You can see the full graph of this Risk Rating 2.0 changes to Michigan below:

The Flood Insurance Guru | Michigan Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

These price increases or rate increases can really discourage anyone from going through FEMA and the National Flood Insurance Program (NFIP). This is why it's equally important to consider going through the private flood insurance market. Now, it's true and we share this as a fair warning that there's a chance that private carriers may not be the answer to your insurance needs.

This is generally because the private flood market has the option not to provide any policy when there's a higher risk of flooding in a community or individual property. Other than that, you want to get the most out of the hard-earned cash you're dishing out for flood insurance premiums. No one likes to pay for a $3,000 premium, only to get coverage that's only half of your property's market value. 

When Will It Happen?

Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date. 

On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.

So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change. 

If you have questions on these upcoming changes, what are your flood insurance options in Michigan, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.

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

The Federal Emergency Management Agency (FEMA) is rolling out changes when it comes to flood insurance rates across all states in the country. Today, we will unpack these changes coming to Maryland and how they can impact your flood insurance in the future.

The Flood Insurance Guru | Maryland Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

The Free State of Maryland has always been subject to floods; its proximity to the coasts and bodies of water within the state itself are catalysts for these floodings to become devastating in one blink of an eye. In recent years, we've seen the state victimized by floods from storms. Today, we want to help our friends over in Maryland with your flood insurance.

On average, more than millions of property owners and properties experience losses that even go to more than a billion dollars due to flood damage. Hurricane season, which generally starts in the month of June also has a lot of data showing how much flood damage the impacted areas get. 

Federal flood insurance is considered the most well-known option when it comes to protecting property from floods. FEMA continuously looking to provide adequate protection to residents through the National Flood Insurance Program (NFIP).

We'll unpack the good, the bad, the ugly changes with the Risk Rating 2.0, and how it will impact federal flood insurance policyholders in Maryland once it kicks in on October 1st, 2021.

The NFIP 2.0

The Risk Rating 2.0, or commonly known as NFIP 2.0 as well, is more of a move of equity. This update on the federal flood insurance program itself will allow you to no longer pay more than your fair share when it comes to premiums as this would now be based on the value of your property or home starting this October. 

We've already covered this in our podcast below, but keep in mind that the NFIP can provide you coverages for damages on your personal property and residential property or commercial building that maxes at $100,000 and $250,000 respectively. In order to get through FEMA and the NFIP, one thing that hasn't changed is that you still need to follow that 30-day waiting period before your flood insurance policy can take effect on your insured property.

The Flood Insurance Guru | Maryland Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

When it comes to the rate changes happening across the country, you're going to see these colors in ranges which represent these changes with flood insurance rates from FEMA. Now, each of these colors represents the good, the bad, and the ugly changes coming to each state.

The Flood Insurance Guru | Maryland Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

The Good

First, let's begin with the good things coming with this NFIP 2.0 update. We'll show this as that green slice. When it comes to this change, we're really happy to see that 61% or 39,905 of federal flood policies in Maryland will experience this change.

Properties affected by this change will get an immediate decrease of more than $100 ($1200 per year). This year, Maryland is about $620, this can really help residents to opt into the federal flood insurance option especially knowing that they can take all risks and rarely non-renews policies.

This can help a lot of homeowners who also can't get a policy written from the private flood insurance market. The private sector is known for its limitless flood insurance coverage and shorter waiting period. Generally, you can have your policy take effect on the same day you pay for it, with a 10-day waiting period, or 14-day waiting period which is significantly quicker compared to FEMA.

However, one of the issues we always see with this sector that gives anxiety for homeowners is that the private insurance company can be in moratoriums when the risk of flooding is too high for their comfort. There's also this chance that after filing for a flood claim and they see that the property has a high risk of flood that they will non-renew your flood insurance policy.

The Bad

Now, the blue slice is going to be a different story here. If you're one of the policyholders included in this change, you're going to have to deal with the bad change with it. This is expected to impact 36% or 23,060 policies in Maryland.

The bad change is due to the fact that there will be an increase ranging from $0 to $10 per month ($0 - $120 per year). This means that you're going to start paying about $700 starting this October. Generally, since we're only talking on average, depending on your property's value, you may even have to pay for more than that amount.

The Ugly

Lastly, we want to cover the smallest percentages you'll see with this Risk Rating 2.0: the pink and grey slices. These two are somewhat similar, but it's important to note that the latter is definitely an uglier of a change than the former.

The pink slice or 2% (1,355) of the active flood insurance policies from FEMA in the state will also experience an increase in their flood insurance rates, but this time around it's going to range from $10 to $20 per month ($120 - $240 per year). This generally means that you're going to have a flood insurance premium of $900 on average.

On the other hand, the grey slice will impact 1% or 624 policies in Maryland. This is what we consider as the uglier change between the two and the ugliest among the rest because the increase will start at $20 per month (>$240 per year). This means that we may even see more than a $100 rate increase.

You can see the full graph of these changes below:

The Flood Insurance Guru | Maryland Flood Insurance: New Federal Flood Insurance Risk Rating 2.0

When Will It Happen?

Now, the date when you can adopt this program really depends if you're doing a renewal or if it's a new business policy. You see, you can expect these changes to start on October 1st and you're going to adapt to these rate changes if you're buying flood insurance from FEMA on or after that date. 

On the other hand, if you're doing a renewal with FEMA after that date then you don't have to take in these new rate changes until April 1st, 2022.

So, you want to be very ready for this. We've been talking about this since last year since basically the NFIP is already 30 years old already and is in need of this change. 

If you have questions on these upcoming changes, what are your flood insurance options in Maryland, or anything about flood, reach out to us through the links below. You can also watch this on our YouTube channel.

Remember, we have an educational background in flood mitigation and we want to help you understand flood risks through education and awareness in flood insurance and preparedness.

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

 

 

Almost everyone has heard that all flood insurance is the same and it all goes through FEMA. While technically this is not true because there is the National Flood Insurance Program and private flood insurance markets.

Today we want to talk about some different ways that you can obtain flood insurance through the National Flood Insurance Program.

There basically two ways to obtain flood insurance through the National Flood Insurance Program

  1. Write Your Own companies
  2. NFIP Direct

There is no wrong way to obtain flood insurance, the only bad decision is not getting it at all. So we want to discuss the benefits of each one of these paths.

Electrical outlet reflected in floodwater in office

Let's discuss what a Write Your Own carrier is? The guidelines they must follow and a list of companies that participate?

First of a Write Your Own carrier also known as (WYO) is participating property and casualty insurance companies to write and service the standard flood policies in their own names.

It's important to remember while these carriers are writing these policies FEMA still retains the responsibility for underwriting losses. Since this is still part of the National Flood Insurance Program there are strict guidelines that must be followed.

Some of those guidelines are as follows

  1. Policy administration
  2. Claims processing
  3. Reports
  4. Operations plan
  5. Time standards
  6. Policy issuance
  7. Discontinue of policies when NFIP is not authorized
  8. Keep flood insurance funds separate from company funds
  9. The Company must investigate, adjust, settle, and defend all claims or losses arising from policies issued under this Arrangement. Payment of flood insurance claims by the Company bind FEMA, subject to appeal.
  10. Compliance with Agency Standards and Guidelines.
  11. Compliance with Appeals Process
  12. Other Flood Insurance. If the Company also offers flood insurance outside of the NFIP in any geographic area in which Program authorizes the purchase of flood insurance, the Company must:
    1. Ensure that all public communications (whether written, recorded, electronic, or other) regarding non-NFIP flood insurance lines would not lead a reasonable person to believe that the NFIP, FEMA, or the Federal Government in any way endorses, sponsors, oversees, regulates, or otherwise has any connection with the non-NFIP flood insurance line. The Company may assure compliance with this requirement by prominently including in such communications the following statement: “This insurance product is not affiliated with the National Flood Insurance Program.”
    2. Ensure that data related to this Arrangement are not used to further or support the Company's non-NFIP flood insurance lines
      Governance on Blue Puzzle on White Background.

While this is not all the guidelines you can see that NFIP has strict guidelines for participating in this program. According to FEMA this program was set up in 1983 with three goals in mind

  1. Increase the NFIP policy base and the geographic distribution of policies
  2. Improve service to NFIP policyholders through the infusion of insurance industry knowledge
  3. Provide the insurance industry with direct operating experience with flood insurance

The WYO program has come along way since 1983 its important that you know what companies participate so you are protected.

There are more than 55 different companies that participate in this program and you can find the list here.

Two women and team work in big storehouse

As you can see there can be some great benefits to this program like dealing directly with your existing insurance company for your flood insurance policy, dealing with an experienced company during the claims process, and also having a good experience when making payments or changes.

So now that we have looked at WYO let's discuss what NFIP direct is and some of its benefits?

NFIP Direct is the system that FEMA has built where agents can directly access the NFIP without going through a WYO carrier. Payments, claims processing, and policy issuance are just a few things the system does.

One of the negatives of using NFIP Direct is if someone who doesn't have flood training or experience can struggle with using it. This is one of the major benefits of using a WYO. This is also one reason why many agents who can only access NFIP Direct sell less flood insurance than those who access a WYO.

You can call it intimidation or just a headache like many agents do.

So is there any benefit for the consumer?

Business man pointing the text Customer Experience

Whether the customer decides to use a WYO or NFIP Direct then the rates and claims processing should be the same. You may just have a better experience with a WYO because of the way they communicate.

So is there a benefit to the agent?

There are usually a few benefits first of all commissions are normally higher through a WYO compared to going through NFIP Direct. There are also normally a lot more opportunities to learn the system and get the support that you need as an agent.

So whether you access WYO or NFIP Direct whats important is that you have a policy in place. According to the FEMA podcast the last 10 years have shown a steady decrease in the amount of active flood insurance policies and a steady increase in the amount of claims filed.

So if you have questions about either one of these platforms then make sure to visit our website. You can also check out our daily flood education videos on our YouTube channel or Facebook page. You can also tune into our daily podcast.

 

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