What is a flood insurance refund and can I get one?

Today we're talking about if you’re flood zone has changed, can you get a refund on your flood insurance? Well, we want to talk a little bit first about the different Flood Zones, and how exactly this scenario will play out. Remember that we have an educational background in hazard and flood mitigation. So what that means for you is we can help you understand your flood risks, your flood insurance, and help you mitigate your property against flood and other hazards long term.
So today we want to talk about what happens when your Flood Zone changes. Can you get a refund on your premiums? What are the scenarios? Well, we want to talk about the three main Flood Zones especially when looking for flood insurance in Knoxville TN, flood insurance in Birmingham, AL, flood insurance in Memphis TN, flood insurance in Atlanta GA, flood insurance in Montgomery Al, and flood insurance Minneapolis MN These flood zones are flood zone A, flood zone AE, and flood zone X.
Flood zone A is going to be like a 500 year Flood Zone and all this is a probability.
Flood Zone, AE is going to be a 100 year flood zone, or just the probability of a flood occurring during a given time period.
Flood Zone X, which is the minimum risk zone these include areas like Houston Texas, Nashville Tennessee, and Toledo Ohio. Probability for this zone, is not really determined because it's so low risk. The benefit of being in a Flood Zone X is flood insurance will never be required if you have a mortgage, or an additional interest on your house.
However, if you're in a Flood Zone A or AE, it is required. So today we want to talk about your flood zone has just recently been changed, can you get a refund on your flood insurance premiums? Well first of all, in order to get that refund, certain things have to happen.
So let's just say that your Flood Zone has changed from an AE, which is the highest outside the coast to an A. This recently happened in some areas like Savannah Georgia. What you want to do is reach out to your local insurance agent, or the Flood Insurance Guru to make sure your policy is rated correctly. Because if you were in the AE, and now you're being moved to an A, it could be a big difference in premium for you and could lower your mortgage payment. So you want to make sure it's rated correctly. Property owners in areas like Minnesota have seen significant savings because of taking this action.
Now, let's say that you were in a Flood Zone A and you were moved to an AE, then what's going to happen is you're actually going to see a difference in premium as an increase because you're going to a higher zone. Now where you're going to see a big difference is if you're moved from a Flood Zone A, or floods on AE, to a Flood Zone X. What this means is you're being moved out of a mandatory flood insurance zone to a non-mandatory. So it's not going to be required that you carry it.
However, it's highly recommended because 30% of flooding does occur in Flood Zone X. Even after back to back years of flooding areas like Tybee Island Georgia and Saint Simons Georgia recently had this happen. As mentioned before zone changes are done on historical data, so even though a property recently flooded does not mean a zone will change. What we really want to talk about is are you going to be able to get a refund? How much of a refund are you going to be able to get? So when you are moved to a flood zone X which is no longer required, what that means is the requirements were moved. So when that happens, FEMA will send you a letter and usually your mortgage company, if you have one, you will get a letter saying, this is no longer going to be required. So at renewal we're no longer going to require you to have it, which is great. Then they take the requirement off your mortgage. More importantly, how do you go about getting maybe that refund for this year?
Well, what happens is as soon as that zone is changed, you can go in and show that letter to the mortgage company, and you could actually either cancel the flood insurance policy and get a prorated refund for that year. Now, what we recommend doing, instead, is just having it rerated as a Flood Zone X keeping the flood insurance policy. As we've mentioned, flooding occurs about 30% of the time in Flood Zone X. So let's just say you're paying $1,200 a year for Flood Zone A, or $2,000 a year for Flood Zone AE, and they move you to an X, generally you're going to be looking at about $450 to $500 a year for that rate.
So we recommend just basically changing the zone on your flood policy and keeping that flood policy. Now, if you choose not to keep it, what's going to happen when it comes to your refund? Let's say that you've had that policy for six months. When this Flood Zone change is done, then you're going to get six months of premium back. Now, here's the next question. You've had flood insurance for all these years, are you going to get it back? No, you're only going to get back the prorated amount for the current year. That's really important to understand, because a lot of people think, hey, I didn't need it all these years. Can I get my money back?" The answer to that question unfortunately, is no.
We just recently had a customer who's been in a high risk Flood Zone that we helped them get their flood zone change to a minimum risk zone. So we took him from that high risk policy to a minimum risk policy. The problem was they had the opportunity to do this for 20 years, but no one showed them how to do it. Once we completed that, of course the customers kind of upset and no one ever showed them how to do this. He could have had some significant savings over the last 20 years. So it's very important that you look at this every year, just like you look at your auto insurance and you look at your home insurance every year at renewal. It's very important that you look at your Flood Zone every year for these types of situations.
You want to make sure that you're still currently in the right zone. So what you want to do is reach out to any local insurance agent, or the Flood Insurance Guru and have them run what's called a zone determination. What that does is it's a determination to see what Flood Zone you're currently in. You want to check this every year because FEMA does do a lot of flood map changes. So for example, if you don't have a mortgage on your house, you may not even know that your Flood Zone changed, because you're not being notified.
The only way you're going to notice maybe if it's in a local newspaper, or a local city council. If you have a mortgage, you're generally going to get a letter in the mail from them. Or if you have some kind of additional interest on a property, you're going to get some kind of letter in the mail from them. So if you've got questions about how to get a refund when it comes to your flood insurance, how to maybe get your zone changed, or are you overpaying? Is there a way to get some of that money back? Please reach out to us, www.floodInsuranceGuru.com. Go to our YouTube or Facebook channels, the Flood Insurance Guru, where we do where we do daily flood educational videos. Or you can give us a call, (205) 451-4294 you can also simply click down and the link below and we'd be happy to walk you through some different scenarios that might be able to help you significantly when it comes to your flood insurance. Thank you.