Insurance can be confusing no matter what product you are talking about. Flood insurance might be one of the most confusing insurance products to understand. First of all outside of coastal areas it is hard to find insurance agents that truly understand it or are familiar with yet.



So should you go to the captive insurance agent or the independent insurance agent?

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Let's talk about how they are a little bit different. First of all there is the captive insurance agent. These are insurance agents that generally work for one company and are controlled by the options they allow. Most captive insurance agencies generally only offer coverage through the National Flood Insurance Program. It is important to know some companies have started to allow some private flood insurance options but are still limited.

Now let's look at the independent insurance agent. This agent many times is referred to as an insurance broker. They generally do not work for one company but instead represent the customer. As a result they can provide more options.

It's important just because someone can offer more options does not mean its the right option. There is not a wrong answer here. Its always best to pick knowledge over options. You want to know if a claim occurs that you are properly covered or if a non renewal situation occurs the agent will be able to walk you through the process.

Let's look at one scenario where your flood insurance rate keeps going up. We recently had a client that had their flood insurance increase from $8000 to $16,000 over the course of five years. The customer had their policy with a captive agency but the agent could not explain why it kept increasing. Come to find out the property was a vacation home for the customer so they were rated in a different table by FEMA than a primary residence would have been. This also had higher rate increases than a traditional flood insurance policies.

The agent explained to the customer that there was only one option for flood insurance and that was through the National Flood Insurance Program.

What the customer and agent did not realize was their was an entirely separate private market for flood insurance. Some of these options did not penalize for the property being a vacation home and they looked at ratings different. The particular carrier the customer went with was a savings of $10,000 a year.

Great right?

Well there was a clause in the policy that said if a claim occurred then the policy could be non renewed making it more difficult to obtain insurance through the National Flood Insurance Program.

As you can see there are alot of different things to understand in these situations.

Being the insurance agent with all the options may not be the best option if they don't have the knowledge.

So whether you decide to go with a captive insurance agent or an independent insurance agent for your flood insurance, make sure to pick one you trust, that has the knowledge, and knows how to adapt to the constant flood insurance changing market.

If you want to learn more about picking the right policy you can check out our daily flood education videos on our YouTube channel or even check out our podcast.

Remember we have an educational background in flood mitigation which means we can help you understand your flood risks, flood insurance, and mitigating your property against flooding.


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Chris Greene


Chris Greene

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


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