Private flood insurance has made a big push over the last 15 years as technology has developed. As natural disasters have caused more and more damage it has put more stress on the National Flood Insurance Program, creating the need for another option.

First of all what is private flood insurance? This flood insurance that is offered by a private insurance company instead of the government.

So what is the update on private flood insurance all about? As we mentioned as disaster expenses have increased stress on the National Flood Insurance Program has increased creating an unaffordable option for flood insurance for many people. There has been the need for private carriers to step in but they could not correctly determine the risk without the advancement in technology. As GIS has come along way it has allowed private companies to step into this market providing more accurate ratings than the National Flood Insurance Program has been able to.

As a result of these changes people who have non government loans have been able to take advantage of these new rating systems for about the last 10 years. The problem has been that the FDIC and other government agencies have not allowed for private flood insurance on loans like FHA, VA, and USDA loans.

This has been a battle that has been going on since 2012 with the Big Waters Act and the government has finally decided to take action. Starting July 1st 2019 government lending institutions will be required to accept private flood insurance.

So will every bank accept private flood insurance? No they will not there will still be certain requirements that each flood insurance policy must meet and some will fail. So what are these requirements?

The following requirements must be meet for a private flood insurance policy to be acceptable

Meet the statutory definition of private flood insurance in the Biggert-Waters Act

Meets the mandatory purchase requirement

Policy provides sufficient protection of the loan, consistent with general safety principles

Policy must be just as broad as an NFIP policy on coverages, exclusions, and deductibles

This new ruling by FDIC is something that has been needed for along time. It it going to cause a lot of confusion at first and is going to take alot of educating and awareness. So if you have questions, maybe you have been turned down for private flood then please reach out to us. You can visit our website Flood Insurance Guru. You can also subscribe to our YouTube channel or like our Facebook page where we do daily flood educational videos. Remember we have an educational background in flood mitigation so we can help you understand your flood risks, insurance, and mitigating your property long term.

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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