Flooding is not a covered peril under your homeowners or business insurance policy. You must have a separate, stand-alone flood insurance policy to be covered for flood waters damaging your home or business. There are a couple of insurance carriers who offer a homeowners/flood combo, but the flood portion is not underwritten by NFIP, and buyers should exercise their due diligence in understanding the exact coverage being offered. At this time, Fulshear Insurance® has chosen not to represent these carriers and does not offer this type of package.
Let’s be familiar with the terminology used when discussing flood insurance.
FEMA is Federal Emergency Management Agency.
NFIP is National Flood Insurance Program.
Flood insurance underwritten by the federal government is a product of NFIP and approved by FEMA, the agency of the federal government.
Within the last year, NFIP implemented the Risk Rating 2.0: Equity in Action flood program, which replaces the flood program as we have known it. The change for new policies was implemented October 1, 2021, and renewal policies saw the change beginning with renewals effective April 1, 2022 and later. There is no longer a fixed rate for preferred zones with identical coverage. Other factors, such as land elevation, is now being considered for all properties instead of just the properties located in Zones A or AE. Some homeowners will see their premiums decrease, but the vast majority will see increases to their premium. An existing flood policy will see up to 18% increases each renewal until the policy reaches the new premium for the Risk Rating 2.0: Equity in Action program. New policies will be issued at the full rate. In some cases, new policies will be issued at a lower rate due to the decreased premium resulting from the Risk Rating 2.0: Equity in Action program. We have already seen this happen with a few cases in the Fulshear-Simonton area.
According to FEMA, most homes in moderate and low-risk areas qualify for the NFIP Preferred Risk Policy. FEMA statistics show if you live in an area with low or moderate flood risk, you are 5 times more likely to experience flood than a fire in your home over the next 30 years.
It is important to understand the different types of flood insurance policies and what may or may not be covered under each policy. What is NOT covered is just as important as what IS covered.
NFIP flood policies are summarized as follows:
The replacement cost value is the cost to repair or replace a part of the home that is damaged, with a deduction for wear and tear. For you to be eligible for the replacement cost value, you must meet three conditions:
The actual cash value is the replacement cost value, less depreciation for physical wear and tear.
Private Flood Insurance is an alternative to NFIP Flood Insurance. Private Flood is summarized as follows:
Excess Flood is an additional flood policy that offers coverage beyond a NFIP or Private Flood insurance policies. It is coverage in excess of the NFIP or Private Flood insurance policies.
Carrying flood insurance on your home offers you peace of mind when it rains. In some cases, it costs less than a cup of coffee a day. The weather is unpredictable, so it’s important to be prepared for the unexpected. Flood Insurance is a measure of financial protection to protect your assets in the event of flooding. It is so much better than "hoping" your area is declared a federal disaster area, so you can qualify for federal disaster assistance. In most cases, disaster assistance is a loan and must be repaid, but proceeds paid via flood insurance is yours to keep and use for repairing your home. Flood Insurance is always the better choice.
It is always a good time to talk about flood insurance! Call your trusted advisors at Fulshear Insurance® to set your mind at ease and put your home or business flood insurance policy in place today. Toll free: 1.855.533.9067 or send us an email with your inquiry: Info@FulshearInsurance.com
For more information regarding floodplains, see the following floodplain mapping tools:
Read more about flood insurance: Myths and Misconceptions
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