The Flood Insurance Guru Podcast Episode 5: Private Flood Insurance Acceptable on All Loan Types

PRIVATE FLOOD FOR ALL!

Starting on July 1st, 2019, the Private Flood Insurance has been made by the Federal Deposit Insurance Corporation (FDIC) to be available for all types of loan. Previously, your best shot at getting Private Flood Insurance was through conventional loans or non-government loans. This new ruling now gives you the power to avail Private Flood Insurance through U.S. Department of Agriculture (USDA) loans, Department of Veteran Affairs (VA) loans, or Federal Housing Administration (FHA) which, as you know, are government loans.

This is great news for you and your property because you are given the option to choose. Before, you might have to go through the Federal Emergency Management Agency (FEMA) with a payment of $3000 flood insurance premium for your government flood insurance policy, but with the private insurance companies, it can go as low as $800. It's a huge win since it would be very good for your debt-income ratio, your credit score, you will have more money for clothes and monthly payment on a house. If you look closely, $1200 is at least one week’s worth of groceries or a couple of months worth of rent (if you are living in a rental property). Through this ruling, you won't have to worry about the maximum limit for buildings and personal property coverage of the NFIP.

BENEFITS?

The ruling will also provide the benefits that the private market offers such as replacement costs, additional living expenses, or business loss of use bringing more relief to homeowners. This also means that you will have the same coverages that the private insurers can offer for your property even with multiple buildings. Flooding can be a real headache especially in special flood hazard areas, so knowing that you can now get the best flood insurance for you is one pain-reliever.

Another important thing is how this ruling positively impacts the National Flood Insurance Program (NFIP). Since people have more options, this will take away some stress for the NFIP who currently has twenty billion dollars in debt.

"This sounds great, Chris! How can I cancel my FEMA loan then?” I hear you saying.

Well, that’s not possible. No worries, this is what you’ll have to do; as your FEMA policy is renewing, you will want to cancel that 30 days before the renewal of flood insurance policy, if you decide to switch over to a private policy or private flood insurance policy. Keep this in mind since this is FEMA’s guidelines and if you missed and let that 30-day period past, your cancellation will be denied and you’ll have to keep the policy for another year.

Although we still don’t know how this new ruling will be implemented and how it’s going to be rolled out, I can tell you that this is something that you should keep your eyes and ears out for. Now, your flood insurance options have no limits. If you want to learn more about your flood insurance options, how the private market benefits you, how the NFIP works, and how this new ruling will affect you, you may visit our website or call us. Check this episode below:

Remember, we have an educational background on flood mitigation, so if you have any questions on flood risks, flood damage, flood insurance coverage, elevation certificates, NFIP, or anything at all on flood, feel free to click our links below and we’ll be there for you: