About a year ago I wrote a blog regarding flood insurance titled: Flood Insurance – Do You Really Need It? In that blog, we discussed what a flood is and how to best protect yourself against any potential loss caused by flooding.
Well, a lot has changed since I wrote that blog. With NOAA predicting an above average hurricane season, and FEMA making changes to the National Flood Insurance Program, I thought this would be the perfect time to revisit this topic.
I reached back out to our friends at Armed Forces Insurance (AFI) to get an update about the changes with the National Flood Insurance Program and to find out if there are any other options that can assist you with your flood insurance needs.
Our friends at Armed Forces Insurance have been helping military families with homeowner insurance for over 130 years and have a specialty department that handles flood insurance for their members. Below is some information to help you determine whether or not you need flood insurance.
What is NFIP 2.0?
FEMA has spent the last several years working to update the risk rating methodology, used to price their flood program, through a new pricing program called Risk Rating 2.0. The current rate plan has not been updated much since the program began in 1968. This new rate plan is designed to be more accurate based on your property’s flood risk. This new method uses the latest flood data and the newest technology to provide rates that are more appropriate for your home address.
So what does this mean for you?
Starting in Oct 2021, FEMA began implementing a new flood insurance rating plan for all new flood insurance policies. Anyone who received a quote through the NFIP after October 1st, 2021, would have gotten a quote/policy on the new rate plan.
Beginning April 1st, 2022, any current NFIP policy holder will experience a change to their flood policy at their renewal date. This will be for all remaining polices that were put into effect prior to the Oct 1st, 2021 change date. By April 1st, 2023, all NFIP policies will be on the new 2.0 rate plan.
Will my price go up or down?
That is a great question. For current NFIP policy holders, the answer is it depends. One thing is for certain, your premium will most likely change.
FEMA estimates that 77% of it’s existing policy holders will see an increase in their yearly flood insurance premium. The remaining 23% will see a decrease. NFIP policy holders with high value homes in high-risk areas will see the largest premium increase, while lower value homes in low-risk areas will price decreases. Essentially, if you live in a very risky location such as those designated as a “Special Flood Hazard Area”, your insurance is going to get more and more expensive.
What can I do, are there alternatives to the NFIP?
For those with current NFIP policies that have not yet renewed, the best thing you can do is reach out to your insurance agent who sold you your flood policy. Your flood insurance agent can help best determine what your NFIP renewal price will be and what options you may have.
In many states, there are alternatives to the NFIP program through private insurers. These private insurers often have different rules and coverage options available for you to choose from. Though private flood insurance is not always less expensive than the NFIP, they can often provide you with an alternative option to the NFIP and potentially save you money on your flood policy.
Private flood insurance is also accepted by mortgage companies if you home is required to have flood insurance as a condition of your loan.
For any new homeowners who are interested in a flood quote or are required to obtain flood insurance, be sure to ask about both NFIP and private flood insurance options. If anyone is not sure where to turn or would like a quote for their home, feel free to reach out to our flood insurance experts at Armed Forces Insurance. Our flood experts are well versed in the NFIP and private insurance flood options. They can answer your questions and let you know what is available to best protect your home.
As a reminder…
Don’t wait until the danger from a flood is about to occur. When you purchase a flood policy, it will take 30 days before the policy will go into effect. By then, it can be too late. Also, a flood policy only covers damage to your home if the water comes from outside your home, not inside. Your homeowner’s insurance policy usually covers water damage that occurs inside your home from bursting pipes to overflowing bathtubs. Be sure to check with your insurance agent to know what is and what is not covered.
Flood insurance is another product that can give you peace of mind in the event something unexpected happens. If you have more questions or would like to see what a flood policy would cost you, give our friends at Armed Forces Insurance a call at 800-313-1936 and ask to talk to a flood specialist today.
As a military family, you need insurance that matches your needs and protects what you value most. You deserve an insurance company that is committed to serving you. MilHousing Network is proud to partner with Armed Forces Insurance to bring military families reliable homeowner’s insurance options when buying a home. Contact them today at 800-313-1936 or visit www.afi.org/milhousing to learn how they can support your unique military lifestyle.
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