Did you know that if you have had the same Flood insurance policy since before 2016 you may be leaving hundreds or even thousands of dollars on the table?
If you have had a flood insurance policy which you started before 2016, chances are you have a policy through the Nation Flood Insurance Program (NFIP). This is a federal program governed by FEMA which provides consumers with standardized rates, meaning that no matter which company or agent you go through the rate should be exactly the same (assuming that agent does your quote right). Since early 2016 there have been a host of new private companies which have entered the Flood Insurance market. This is great news for you, as this means you have more options finally for your flood insurance! So if you have had that same flood policy since before 2016 you need to check on getting a quote from one of these new private companies as you may be overpaying dearly. Also your flood policy through Many of these new private companies can offer better coverage at a better price. Worst case may be that you discover your placement with NFIP is the best for your scenario, but you would be wise to at least check.
Also did you know that Flood is typically NOT COVERED under most homeowner's insurance policies? That is because it is usually excluded on most homeowner's policies as a standard provision (although some companies can now include it on your homeowner's policy,)
Imagine that you are home for what appears to be your typical rainy day in Florida. However, on this day the rain doesn't let up and its coming down hard. Before long you (and most of your neighbors in their homes) are ready to panic as the water that usually pools up in your driveway recess is now pouring over into your garage. The rising water slips right through your entry doors and makes its way throughout your entire home. When you find out that your homeowners policy does not cover you for flood you are going to be upset. Unfortunately, this is the case with most homeowner's policies. Even if your policy includes coverage for water damage, Flood is not considered water damage by most insurance policy definitions.
This does not mean that you are not covered for any rain damage if you have water damage covered under your home insurance policy. It does mean that you need to be educated on what is included before you blindly purchase a policy to cover something as valuable as your home.
So in a nutshell, insurance can be tricky. Keep in mind when shopping for flood insurance, it's what you don't know that can really hurt you. No two companies write the same exact policy, and where one company may give you something another may take it away. This is why having a good agent is so important. When shopping for insurance make sure to find an agent that is willing to answer all your questions, and more importantly ask you all the right questions to ensure you are covered correctly.
Flood VS Water Damage
Although it may appear that water has damaged your home during a flood, technically your homeowner's policies may disagree. Insurance policies are filled with terminology that if you don't pay close attention to can financially sink you after a natural disaster such as a flood.
In insurance, Flood can be defined as a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow. If you do some research you will notice this is not how your homeowner's policy defines "water damage", which may be covered under your policy. If you are concerned by the risk of flood damage, or flood is mandated for you to carry (lender request, etc.) you can usually obtain a flood policy through several sources.
Questions to ask include:
Does my homeowners policy include flood coverage? (some companies offer this now!)
Can I bundle flood insurance with my homeowners? (No discounts left behind!)
Do I need flood insurance for my home?
What will flood insurance cover me for?
If you are looking to see if a home is in a flood zone per a FEMA flood map, click below:
Did you know that most people who have flood insurance are likely through FEMA's National Flood Insurance Program (NFIP). This is a Federal program which offers subsidized rates many homeowners looking to protect their homes from flood damage. If you do not have a flood policy now you should check with an agent to see what options you have. With new home closing documentation, an elevation certificate, and a down payment you can usually get covered in less than 30 days through NFIP.
If you currently have flood insurance through NFIP there are several other options (you are probably with NFIP if you have flood insurance now). Fortunately, this is no longer the only route to go if you are looking to protect your home from a destructive flood. Some homeowner's companies are now offering the option to bundle your home and flood onto one policy. This can benefit you in several ways, one of which is the possibility of a bundle discount! Also, new private companies have recently emerged who are willing to insure your home against the risk of flood. These private companies can offer you a lot more coverage for a reduced rate in many cases.
If you have not considered these alternative options then you should contact an agent who has multiple options for your Flood insurance. You may ultimately find out that NFIP is your cheapest option for your flood coverage, but don't leave money on the table just because you were afraid to ask!
Questions to ask include:
What options do I have for flood insurance? (NFIP, Included on Homeowners, Private Companies.)
Does my homeowners insurance policy offer flood coverage at a cheaper rate than my current NFIP policy?
What kind of waiting period would I have if I purchase a flood policy? (NFIP usually has a 30-day waiting period)
What Do I Need to Get Flood Insurance?
Most policies start with a quote, and flood is no different. However, you may get stone walled by an agent if you call asking for a flood quote as there is usually a required form needed even to obtain a quote (from NFIP). This form is called an Elevation Certificate. You most likely will have to have a survey done (assuming one hasn't been done already) to get an Elevation Certificate which is needed when being quoted by an agent through the National Flood Insurance Program. Depending on your homes age and the city you live in one may be obtainable through a city official.
Fortunately, this is not always true as some private companies exist that may not require one for a quote. If you are having issues finding an agent to quote you without having access to an Elevation Certificate please feel free to call us.
"Grandfathering" Your Flood Insurance
Imagine you're shopping for a new home and through your search you discover the house of your dreams. Its right in your price range, perfect size, and it's even close to the water. You put a bid in on the house and it gets accepted! All the necessary inspections (home inspection, survey, appraisal, etc.) are being done as requested by your mortgage company. The survey comes in and your agent quotes you a flood insurance policy that costs over $3000 per year!
Fortunately, this may not be the end of road in your pursuit of your dream home. Depending on when your dream home was built, it may have been built in "compliance" at the time of its construction. What this means is that you may be able to get a lower rate on your flood insurance through NFIP based on its elevation and the flood maps in effect as of its completed construction. You will need the correct documentation, which isn't always readily available and can be hard to find in some cases. But the bottom line is this nightmare of an insurance situation may have a silver lining at the end. Don't be afraid to ask your agent, or find one that knows more on Grandfather your flood insurance.
Questions to ask include:
Is my home eligible for “grandfather”?
What documentation is needed to “grandfather” my home’s flood insurance?
Where can I find this documentation?
What is Covered by My Flood Insurance Policy?
Did you know that if your flood insurance is through National Flood Insurance Program (FEMA), most detached structures are not likely covered by your flood insurance policy? Your Flood policy most likely only has two coverage’s listed, dwelling and contents. Dwelling is referred to as the primary building listed on the policy (main home), and does not include any detached structures such as a detached garage, storage shed, fence, etc. If a flood sweeps away your pool house which is a stand-alone second building on your property, you may be upset to find out this is not covered by your flood insurance. Also, something to note is that a standard NFIP flood insurance policy has your dwelling coverage capped at $250,000. If your home is worth more than that, you would be best to obtain excess flood coverage to make sure you are adequately insured.
Contents coverage can be included, but keep in mind that you may be capped at a max of $100,000 and you are insuring your contents at actual cash value. This valuation of your personal property means it will be depreciated and you will most likely receive pennies on the dollar for your valuable personal belongings in the event of a claim.
If you have questions on what is or is not covered on your flood policy, you should ask an agent to go over your policy with you. Also with many new private companies entering the flood insurance market there may be deals out there that provide you better coverage and in some cases a much lower cost.