As if flood insurance weren’t complicated enough, the whole rating process is changing again as of October. Elevation certificates won’t be required any longer, but knowing the elevation of your first floor will become very important. Replacement cost and construction type (frame or brick) will be used as part of the calculation, as well as the actual distance to any water source, such as a river, shore, coast, levee, dam, lake, etc. Prior claims also will be included as part of the rate for 20 years. Flood claims follow the property, not the owner, so be sure you know your property’s history.
Owners still can transfer their flood policy to a buyer. The maximum coverage available still will be $250,000 for homes and $500,000 for a business building. We still will have flood zones and 30-day waiting periods for coverage to become effective unless there is a loan closing. The Federal Emergency Management Agency is simplifying the foundation types; your home either will be non-elevated or elevated. Policyholders will be able to select their coverage level for contents.
So with all these changes, what’s the bottom line? Your new rate will be higher, but there still will be caps on how much of an increase you will see each year as you work your way up to the new higher rate, as long as you keep your coverage active. Credits to your rate will be available if you have flood mitigation such as a raised home or raised equipment and machinery, flood venting and flood proofing. You also will have a lower rate if you are in a more favorable flood zone or your home is farther from a possible flooding source.
The most important thing to realize is that you will be penalized should your flood insurance lapse. FEMA is reducing the number of days for reinstatement eligibility to a max of 29 days. If you forget to pay your flood premium and the coverage has lapsed over 29 days, you will need to immediately go to the new higher rates. So be sure your policy is in place, and don’t let it lapse!
How will you be able to reduce your flood insurance rate? Add flood mitigation for your home, look into higher deductibles and private flood markets and pray for no flooding in our area.
Angelyn Treutel Zeringue is president of SouthGroup Insurance Services, a CPA, PWCAM, CBIA and licensed Trusted Choice Insurance Agent. Reach her at www.southgroupgulfcoast.com, (228) 385-1177 or azeringue@southgroup.net.
