Flood Insurance – No longer an exclusive product for coastal property owners

By: Denise Koslowsky


flooding in luxurious interior. 3d creative concept

In a recent article on Property Casualty 360 that we shared on our facebook page a study by the University of Bristol revealed that the risk for flooding is higher than the current FEMA modeling shows. The study estimates that 41 million Americans are at risk from flooding rivers. That is almost 3 times the current estimate and does not include those who own homes on the coast.

That means that there are potentially millions of Americans who are at risk for flooding and will have no insurance coverage should a disaster strike.

The so called 100 Year Flood no longer really happen every 100 years. Factors such as climate change and an increase in local urban development can make the risk of a catastrophic flood higher. So if your home isn’t in a “flood zone” you may forgo flood insurance when really, it bears consideration.

Although some homeowner policies offer limited coverage for water damage, flooding is typically a standard exclusion on all home insurance policies. The National Flood Insurance Program (NFIP) is flood coverage that is currently available to almost everyone. Unfortunately, NFIP has fixed limits on coverage for single family dwellings that do not offer adequate coverage for many homes. (Under NFIP the limit for the building structure is $250,000 and $100,000 for its contents). We partner with a handful of carriers that offer their own specialized flood products for existing insurance clients at very favorable prices. However, this is based on the flood zone and is not available to everyone.

If all of that sounds confusing, don’t worry, Advocate is here to help you determine how your property is designated and what that means in terms of your rates and the types of coverage that are available. We will explain the policy options to you so that you can fully understand and will help you make an educated decision.

News for the future of US Flood Insurance
There is a new flood reform bill currently in the works. HR 2874 would give consumers more choice when purchasing flood insurance outside of the coverage currently provided by the National Flood Insurance Program. This often creates a gap in insurance for those with homes located in flood zones, particularly those who own waterfront homes.

If this bill is passed it is a win for us all. It would improve the availability, coverage and cost of flood insurance and make the link between FEMA and the insurance industry more synergized. Improvements could include:
• More flexibility for limits and deductibles
• Availability of special endorsements for basements
• Ability to customize solutions to meet individual needs
• Add local knowledge to enhance quality of analytics

What’s the bottom line? If you have any concerns about your home being at risk for flooding, please give us a call. The sooner, the better, there is a 30 day waiting period to purchase flood insurance from The National Flood Insurance Program so it is best to have the discussion before flooding becomes a threat. We are committed to Educating Each Client We Serve so we can help you understand your risks and help you made a decision that is best for your particular situation.

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