Flood Insurance Rate Increases

Flood zone map changes will directly impact your flood insurance rate. Will it be for the good, the bad, or the ugly? Let's look into that

In this episode, we briefly cover what the Federal Emergency Management Agency (FEMA) and the National Flood Insurance Program (NFIP) flood map updates can mean for you. How this changes flood zones and equally your flood insurance rate.

As you'll see, we shot this video on a flooded area and the background noise describes how strong the river is flowing. The thing is that this area we filmed on is generally not an area that gets a lot of flood which makes the flooding more unusual.

This kind of events is causing a lot of flood maps to change and be updated across the U.S. Areas that typically wouldn't flood are now getting flood water, with or without a major disaster.

The NFIP and Federal Government just made an announcement that there will be rate changes in certain areas just this week. For example, if you live in a low risk flood zone, you're going to look at a 6% rate increase in your flood insurance policy. Low risk flood zones are generally not required to have flood insurance, but right now, these are the areas which are getting around 26% to 30% of floods than usual. If you're newly mapped into a 100-year or 500-year flood zone, then you can expect a rate increase of 11% at the least.

Say, you're paying $2000 rate per year for your flood insurance then you're going to get an increase of $200 or more with your flood insurance rate.

When it comes to higher risk flood zones or special flood hazard zones which get more flood and has to face insufferable flood damage, the flood insurance rate can be higher. Since risk of flood is generally higher in these zones, you're going to have to pay for a higher premium compared to low risk zones.

You might ask, how do I fight these changes?

Well, one of the options is to get an elevation certificate showing that your property is above the base-flood elevation which can get you removed from these areas and reverted to your original flood zone. Even proving that your elevation numbers are different from the NFIP can lower your flood insurance rates.

Another option is to move to the private market which can offer you more coverage although, at the time of writing, this may only be possible if you have a non-government loan. As we covered before, the private market isn't something to be scared of since they do offer the same benefits, if not more. The coverage from private insurance companies can provide more for your buildings and contents. You can learn more on the private flood insurance market by streaming our podcast below:

If you have any questions about these changes, you can always let us know and watch more of our YouTube educational flood videos by clicking the links below: