There have been recent changes to flood insurance. The following is a brief overview on flood insurance and what you need to know in 2015.
One of the most important things to know is that damage from flooding is excluded on a standard homeowner’s, landlord's, renter’s or condo unit policy. The only way to have coverage for flooding is to purchase a separate stand-alone flood insurance policy.
What is a “flood"?
The National Flood Insurance Program (NFIP) defines flood as a temporary condition of partial or complete inundation of two or more acres of normally dry land. A flood is typically rising water entering your home, which could have been caused by heavy rain, a tropical storm, a hurricane, or other conditions that impact the state. Keep in mind that you do not need to live near water to be flooded.
How much is flood insurance?
Your flood zone is the primary factor that determines the cost of flood insurance. Flood zones X, B, and C will be considered a "Preferred Risk Policy” (PRP), a low cost option for Low to Moderate Risk locations. Although properties in this zone may not be required by a mortgage company to have flood insurance, keep in mind all areas are susceptible to flooding, although to varying degrees. According to the NFIP, 25-30% of flood insurance claims come from these low to moderate risk areas. Flood zones A, AE, V, and VE are considered High Risk Zones and an Elevation Certificate completed by a land surveyor helps determine the premium. If you would like to know the cost of flood insurance for your specific property, please contact us. Note that there is a 30 day waiting period after purchase for coverage to be effective.
Which coverage option should you choose?
You typically want to match your flood insurance limit to your home insurance policy’s dwelling limit. Your flood insurance renewal may give you different coverage options to choose from.
Why did my policy increase $250?
The most recent flood insurance legislation, known as the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), has implemented a $250 surcharge on all flood policies IF the owner of the home does not live in the insured home for more than 50% of year. To remove the surcharge, ACTION IS REQUIRED of you. You will receive a letter from NFIP with a "Verification of Primary Residence" form that you must complete, sign, and send in order to remove the $250 surcharge on your renewal. As your agency, we can also help remove the surcharge by sending certain types of documentation to the NFIP, such as a copy of Drivers License, Automobile Registration, or Proof of Insurance for a vehicle. If you have questions about the surcharge, or need help removing it, please contact us!
As you can see, flood insurance is important, sometimes confusing, and always changing. We would be happy to help answer any of your questions and review your flood coverage options. Contact us!