What Gets Your Vote: NFIP or Private Flood?

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.