In episode 10 of The Flood Guru Podcast we discuss what is a policy transfer or assumption?

So what is a flood insurance policy transfer or assumption? This is when a flood insurance policy is transferred from one property owner to another one. Wait a minute flood insurance can be transferred? Yes it can in certain situations. So let's talk about when this can take place.

When can flood insurance be transferred?

Flood insurance can only be transferred in certain situations. First of all it needs to be a National Flood Insurance Program or FEMA policy. The residence type needs to be the same for the current owner as it will be for the new owner. For example it would need to be the primary residence for the current owner and new owner. The coverage would need to be the same, since coverages can only be changed at renewal. So if the new property owners mortgage company is requiring more coverage than what is on the current policy then the policy is not transferrable.  While most companies that write through FEMA allow these policies to be transferred there are some that do not. For example USAA is one that only allows these if you meet the membership qualifications of USAA. So if this is a FEMA USAA policy you want to make sure you meet their qualifications in order to transfer it.

Why transfer a flood policy?

There are some really good reasons to transfer a flood policy. First of all it locks in the rate on the policy. So if tis flood insurance policy was grandfathered and that flood zone is no longer available then you are still able to take advantage of those preferred rates. Transferring a policy also keeps the continuous coverage rule in place. FEMA or the NFIP gives significant discounts for having continuous coverage with no lapse. Another benefit especially if you are selling a home is the new buyer does not have to pay anything on the flood insurance since it was paid up front. This can help with the closing cost on a new home making it easier to see a property.

So we have discussed what is a flood insurance policy transfer, when can a flood insurance policy be transferred, and why would you transfer a flood insurance policy? 

Maybe you have some further questions about this process? Make sure to visit our website Flood Insurance Guru, our Youtube channel The Flood Insurance Guru, our Facebook page The Flood Insurance Guru where we do daily flood education videos. You can also give us a call 205-451-4294 or click the link below to learn more about flood insurance policy transfers and assumptions.

Chris Greene

Author

Chris Greene

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