This is no April Fool's joke, but a big change is coming to the claims process and rating for federal flood insurance.

In this article, we want to discuss the changes to the claims variable and how your flood insurance premiums are going to be impacted by the new claims rating system with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP). We want to discuss three (3) things that you to know about this upcoming change to flood insurance on April 1st, 2023.

Flood Insurance Claims

First, let's cover how flood insurance claims can impact not only your flood insurance policy but also how risks are viewed for your property or home.

When it comes to the federal side of flood insurance under the National Flood Insurance Program (NFIP), flood claims can directly impact your rates. This happens in two forms with Risk Rating 2.0: the Severe Repetitive Loss (SRL) and the Claims Variable. As a policyholder, it's important to keep in mind these keywords.

The Severe Repetitive Loss (SRL) list for properties indicates that the property has filed more than one flood claim in a 10-year period. Generally, this indicates a higher risk for flooding and will in turn impact the flood insurance premiums of a certain policy.

The claims variable on the other hand is the newer claims rating factor that was introduced with Risk Rating 2.0. Initially, this new system will clean the policyholder's flood claim history and start from scratch.

However, if a claim is filed and paid out, the policyholder will see a potential increase in premium rates as FEMA will conduct a 20-year lookback where they will count all of the flood claims made during that period. This claim variable will produce a number that becomes a multiplier for the rates and is dependent on the number of claims made during that period.

But what are the coming changes to claims with FEMA for April 1st, 2023?

3 THINGS CHANGING WITH CLAIMS

1. 10-YEAR WINDOW & CLAIM DATES

One of the big things to have changed when it comes to federal flood insurance claims rating factor is dates.

Previously, if you were to file a claim under Risk Rating 2.0 with FEMA, they will start to do a 20-year lookback which means that they will look at all the claims made on the property for flood insurance for the past 20 years. The number of claims made will be used as a claim variable which acts as a multiplier for your flood insurance rates.

This lookback is changed to only do a look back for 10 years only. This can make it easier for property owners to avoid a higher claim variable.

Another change that involves dates is more focused on when FEMA's claim rating factor kicks in. Previously, any and all claims made during Risk Rating 2.0 will immediately trigger the claim review. These claims may be from any time prior to April 1st, 2023.

Basically, all of the claims made in the past 20 years regardless of the date will be sent as part of the review. Generally, this could also mean that there will be higher rates due to having a higher claim variable. 

For this new update, you will have to file a claim on April 1st, 2023, or later for the claim review triggered. This simply gives more leniency and a chance for property owners to get more breathing space before claims impact their rates.

This is important because...

2. WHAT TRIGGERS THE CLAIM REVIEW

Before this upcoming update, even if you file just a single claim during Risk Rating 2.0 — which means any flood insurance claims made before April 1st, 2023 — will immediately trigger the review. This can really hurt especially with how flooding behavior has changed in the past decade.

With this update, you will now have to file 2 claims within this 10-year period for the claim review to be triggered.

 

We recently had a customer who had these troubles with the previous system where they had two flood claims made in the last 20 years but only one in the last ten years. In the Risk Rating 2.0 claim review, this meant that both claims will be part of the claims variable however with this update, only one of them will be considered. 

3. WHAT CLAIMS ARE EXCLUDED

Let's move into another category in this update which concerns more about what types of claims are excluded in the Risk Rating 2.0 review and which ones are excluded in this April 1st, 2023 update.

Previously, the only exclusions are for Increased Cost of Compliance (ICC) and Closed Without Payment (CWP). So this meant that if you filed a Loss Avoidance Claim, you will see this included. Generally, this meant that the previous system also uses Loss Avoidance Claims to trigger the claim review.

With this new update, Loss Avoidance Claims will be added to the exclusions. These are claims made for helping your property avoid damage from flooding which includes things like sandbagging, and creating temporary levees, or water pumps to name a few. Generally, this goes around for $1,000 with a standard flood insurance policy.

So you can imagine that if these are still to be included with the rating factor for claims, it could really become a burden for policyholders, but that won't be the case anymore.

You can see the full breakdown of what we discussed here:

These are the upcoming changes to how flood insurance claims work with federal flood insurance. 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:

The flood insurance market has been constantly changing for a couple of years. We've seen this happen for federal flood insurance and even for flood insurance availability.

One of the biggest changes came in form of allowing private flood insurance for property owners who have an FHA loan, USDA, or even VA loan. In this article, let's talk about how the private flood insurance market is changing the whole flood industry.

Coverages

When it comes to understanding how the private flood is changing flood insurance coverage, we first need to get a basis or some form of comparison to the National Flood Insurance Program (NFIP).

So, let's just mention here that when it comes to federal flood insurance, you only get a maximum of $250,000 in building coverage and $100,000 in contents coverage or personal property coverage for residential flood policies. This coverage amount can go up to $500,000 if you're doing a commercial flood policy.

Now that we've established this, it's important to highlight that private flood insurance companies don't have these coverage limits. You can definitely still get more than $250,000. Even when it comes to personal items or content coverage, you can definitely go more than $100,000 for flood damage. That coverage also comes with the loss of use, additional living expenses, and/or replacement costs.

Pricing

When it comes to pricing, private flood insurance also offers more flexibility and is generally cheaper. This is especially true if we look at how the National Flood Insurance Program (NFIP) Risk Rating 2.0's impacts which will cause around 77% of the properties to get an increase in premium rates.

To know more about private flood insurance pricing, watch the video below to know more:

Claims Payout and Wait Period

Now, let's jump into what may be the most crucial parts of your flood insurance policy: claims and wait periods.

When it comes to wait periods, private insurers generally have a quicker turnaround time for your policy to take effect on your property. Most private flood insurance policies can be available and take effect on your property within a maximum of 15 days.

This is relatively shorter than federal flood insurance with a strict 30-day period. This can be helpful since you immediately get coverage and flood protection on your property quicker.

This type of faster wait time is also applicable for a claims payout. When filing for a flood insurance claim with private insurers, you may get the payout on your private policy within a maximum of 60 days. Now, it's important to note here that this generally depends on private carriers, so your flood claim may be available at an earlier time.

Payment Options

Payment options with private flood are almost similar to the National Flood Insurance Program (NFIP). So you can pay this out of your pocket or through your mortgage bank. When we say that you pay out of your pocket, this means that you pay for the whole premium via cash or using your own funds.

This is drastically different from mortgage payments since carriers would generally bill your bank for your flood insurance. What is important to note here is that there will be more mortgage payment options moving forward as the private flood is now available even for FHA, USDA, or VA loans.

Additionally, some private flood carriers may offer quarterly payments. This may provide more flexibility in paying your flood premiums, but there will be no delay in your flood protection and coverage. This can really be beneficial for premiums that are relatively high. Although banks may not be able to push through with this, paying $2,000 quarterly is way easier than paying it whole upfront.

It's also important to mention here about payment grace periods which, depending on your carrier, may have a 29-day grace period, 7-day, or even no grace period at all for payments to be made.

Want to know more about the difference between NFIP & Private flood in 2023?
Watch this video below to get started:

CHANGING FLOOD MARKET

So this is how the private flood is adapting to the constant changes in the flood insurance market. It's important to keep in mind that this generally doesn't guarantee that it's the best option for your needs. Sometimes, private flood may not be available because most of its assessment isn't based on flood zones alone.

If you want an in-depth understanding of private flood insurance, make sure click below to access our Private Flood Insurance Course:

We will have to wait and see if federal flood insurance will also follow the path that private flood insurance is taking or one-up it by doing more to fight flood risks and provide more substantial flood protection for residents across the United States.

If you want to start your flood insurance, follow these three simple steps:

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

If you have additional questions that are related to flooding and flood insurance, make sure to visit our Flood Learning Center where we try to answer all your questions. Click below to start your flood learning with us!

When it comes to coverage on flood damage, it's important to know what insurance policy can provide this for you. Sometimes, you may receive a flood coverage rejection letter. Now, you might be wondering what is this document and why is it important.

In this article, we talk about this flood coverage reject letter, your flood insurance coverage, and how knowing this can really help your property be saved from flood loss.

Understanding Insurance Coverages

In order to understand this letter, first we need to go back to the coverage process and terms when it comes to other insurance policy types.

This is the best time to really mention that when it comes to homeowner's insurance policy, you don't really have coverage for flood damage built-in or included with your standard homeowner's insurance. Most of the protection that this insurance will provide will be for water damage, disaster damage like tornadoes, fires, earthquakes, and sometimes even mold damage. However, this does not really cover damages or losses from flooding. 

You also have auto insurance on this topic, but the coverage with this policy is only for your vehicular damages. This can be through natural causes like disasters that we mentioned or accidents.

But one thing that you may get from your insurance agent for both of these policies is the flood coverage rejection letter.

What is Flood Coverage Rejection Letter?

This letter is a document that you are expected to sign to acknowledge that when it comes to your homeowner's or auto insurance policies, you are aware that you won't get coverage for the damages due to flooding from these policies.

The purpose of a flood coverage rejection letter is to really get your confirmation that you are aware that you won't get any flood insurance coverage from these policies.

Sometimes, your agent might send you this letter and if you sign it, you directly reject or decline the flood coverage offered by them. Now, this is important because when a flood loss happens, you may not file for a flood claim since you already signed the rejection letter.

Basically, signing this letter simply means that you agree to not get coverage for flooding.

What If You Didn't Get One?

On the other hand, if you didn't get a flood coverage rejection letter from your insurance carrier for your property or vehicle, then that simply means that they didn't offer any coverage.

Generally, you might need to get a separate flood insurance policy if you want to be covered for flood damages. So, you might be wondering, what are your flood insurance options?

A standard flood insurance policy with the National Flood Insurance Program (NFIP) can provide you coverage for a maximum of $250,000 for building coverage and a maximum of $100,000 for content or personal property coverage for flood losses. This is especially true if you have a policy with the NFIP and even with its recent Risk Rating 2.0 update.

On the other hand, private flood insurance is where you can find more flexibility as their standard flood policy coverage doesn't really have limits. You can generally go way above that $250,000 and $100,000 coverage with federal flood insurance.

To learn more about the NFIP and Private Flood insurance, WATCH the video below:

Get Flood Insurance

Nowadays, flood insurance is a must because flood damage can happen anywhere. As we always say, all properties should have coverage from flooding since floods can happen anywhere even in places that aren't considered high-risk areas for flooding.

Getting the right flood coverage with your home can really help you reduce the impacts of flood risk and bounce back from a natural disaster like this.

So if you have additional questions that are related to flooding and flood insurance, make sure to visit our Flood Learning Center where we try to answer all your questions. Click below to start your flood learning with us!

Let's start simplifying your flood insurance. You only need to follow our three easy steps:

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

We've recently covered one of the biggest changes coming to flood insurance and options. We're talking specifically about getting the private flood insurance option available for FHA-insured loans.

You might be anticipating how you could do this and in this blog, we want to talk about how you can switch to a private flood insurance policy even if you have a loan with the Federal Housing Administration (FHA).

 

FHA Accepting Private Flood

You might be wondering why this change is a big thing for the flood insurance market. It's important to note that if you have an FHA loan you can only get a flood insurance policy with the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP).

However, on December 21st, property owners will be able to get the private flood insurance option with the proposal that the Department of Housing and Urban Development (HUD) announced just his month. One of the goals of this proposal is really to give promote consumer options.

This upcoming change can really help homes find more security and openness to private flood. It's important to note that, unlike federal flood insurance, private flood insurance coverage doesn't have limits.

Private flood insurance policies have the ability to go above $250,000 (building coverage) and $100,000 (content/personal property coverage). This coverage amount is generally what a standard flood insurance policy with the NFIP offers. Additionally, you can generally also have the option to get excess flood insurance and additional living expenses with private insurers.

So you might be wondering now how to switch your FHA flood insurance to Private Flood.

 

FHA to Private Flood

Before you start canceling your flood insurance, it's important to keep in mind that there is a process that will allow you to get a private policy with an FHA-insurance loan.

First, you need to keep in mind that you can't immediately switch from your NFIP flood policy to a private policy since you have to wait for your renewal date to switch to admitted private insurers. This means that the switch can only be done on or before your renewal date.

If you miss this period then you will be stuck with the current flood insurance policy and you will need to wait until the next renewal date before you can get that chance again.

You can only switch to a private flood insurance policy with an FHA-insured loan if you are doing a new loan. Take note that this new loan cannot be a line of credit loan. So, this will only be valid if you're switching from an FHA to a VA or USDA loan.

 

Canceling Your Flood Policy

One of the crucial things that you should do first is to send a signed cancellation letter for your flood policy to FEMA and the National Flood Insurance (NFIP). You would need to have this sent within 30 days of your renewal. This is crucial because FEMA and the NFIP may not cancel your flood policy renewal because a payment was already made by your FHA-insured mortgage.

Equally, you also need to send a copy of this signed cancellation letter to your bank especially if you have a mortgage. This is integral for you to avoid force-placed coverage. Make sure to watch our video below to understand what force-placed coverage is.

Changing Flood Markets

Introducing the availability of flood insurance from the private flood insurance market can really spell good things for fighting flood risks across the country. This move may really help encourage homeowners to get flood insurance to find sufficient protection against flood damage. This is especially true for those who are in special flood hazard areas.

Giving property owners more flood insurance choices either with a federal or private flood policy can really help in making sure that everyone is ready against floods.

 

If you want to know your flood insurance options, how to handle your flood insurance in Birmingham, or anything related to floods, click below to go to our Flood Learning Center where we try to answer these questions for you.

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

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

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

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

Full Coverage

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

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

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

NFIP Risk Rating 2.0

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

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

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

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

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

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

Private Flood

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

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

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

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

Additional Living Expenses

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

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

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

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

Your Vote on Flood Insurance

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

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

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

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

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

Midterm elections are happening right now and considering that this will change the future state of our individual communities, we also want to look at what this could mean for your flood insurance.

So where should you cast your ballot between the National Flood Insurance Program (NFIP) and private flood insurance? How will your vote impact flood insurance long-term for you and your property?

Midterm Elections

The midterm elections are getting really interesting as things heat up for the Governor and Senate positions. This is especially true even here in Georgia. The same can be said for flood insurance, not just for the state of Georgia, but for the entire country. 

First, let's talk about your coverage benefits from both the National Flood Insurance Program (NFIP) and private flood.

National Flood Insurance Program

Coverage

When it comes to flood insurance, the Federal Emergency Management Agency (FEMA) has moved into a new system of coverage with the NFIP Risk Rating 2.0.

For residential properties and homes, you'll be able to get a maximum of $250,000 on building coverage and $100,000 on residential content. There will be no additional living expenses coverage. So it's pretty simple.

For commercial properties, however, the coverage will be maxed out at $500,000 for buildings and $500,000 for commercial contents. This still won't have any additional living expenses coverage.

What's important to remember here is that FEMA and the NFIP generally won't non-renew your policy. So you won't really be seeing a midterm cancellation with federal flood insurance. There are exceptions however, a flood insurance policy will be canceled if you're listed within the builder's risk or within 12 months to get your property built or after that, you'll have to take out a new policy.

Risk Rating 2.0

It's important to also remind ourselves that Risk Rating 2.0 presented a new system on how your premium rates are getting calculated. This new rating structure is the main focus on concern for the cost of flood insurance.

For one, the rating system no longer uses flood zones and flood maps as a basis for flood insurance premium rates. This is because Risk Rating 2.0 is more concerned with flood risk variables. These items are everything that may influence the risk of flooding on your property. This new system can really confuse a lot of property owners on how your risk is calculated. These factors include types of flooding, flood frequency, lowest-rated floor, replacement cost, distance to water, and flood claims history to name a few.

Now, this is somewhat presenting somewhat of a trust issue for property owners as you don't really get to have a view of how many percentages of your premium rates are from each variable/factor.

Private Flood Insurance

Coverage

Now, when it comes to private flood insurance, you might be able to see more flexibility when it comes to coverage. So that coverage limit of $250,000 and $100,000 for residential and $500,000 for commercial won't really be taking effect for private flood policies.

This generally provides more room to bounce back in the event of flood damage without worrying about premiums. Depending on your flood insurance carrier, you may also get some additional living expenses coverage, business loss of use, and other additional coverage with your flood policy. So outside of coverage for property damage and personal property, you also get more from the private flood.

However, what you should know is that since these policies are from private insurance companies, they aren't held back by the government hence they can easily non-renew your policy. They can also pull out any existing flood insurance policy in a specific community.

So these are some things that you want to consider before casting that ballot your vote for your flood insurance option. However, the most important thing here is to vote for the flood insurance option that works best for you and your needs.

If you want to know more about flood insurance, visit our Flood Learning Center:

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

• Fill out this form —

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