Know Flood Newsletter Q3 2020

Understanding Loss History

Do you understand when you purchase a home in a flood zone that the history of damage and claims follows along with the property from one owner to the next?”
 
Flood claims are specific to the property itself, not the owner. Why is this so important? Once 4 substantial claims have been placed on a property the new designation for the home will be classified as a “Severe Repetitive Loss” structure. This designation will significantly increase the cost of your flood insurance premium with the NFIP and exclude many private flood options.

Once the property is put into this category there are ways to reduce your premium through flood mitigation measures. Please refer to our website for the many ways to significantly reduce your flood insurance premiums with mitigation
 
The way to receive the most significant relief is to elevate the structure.  Elevating to the minimum requirement, base flood elevation plus one foot, protects you against most major flooding events. Elevating at least three feet beyond the Base Flood Elevation protects against even more and increasingly significant events.  Elevating four feet gives the largest insurance discount.
 
One of my clients in Scituate followed this exact measure. The property was elevated to three feet beyond the required base flood elevation for a significant savings on the annual flood insurance premium. The reduction was enormous and immediate once the structure was elevated.
 
However, the FEMA flood insurance designation as “Severe Repetitive Loss” was not removed from the property history. This is critical to receive maximum savings on your flood insurance premium. The properties new designation as FEMA compliant affords you cost savings but a brand-new history regarding claims will reduce your premiums that much further. Removing the “Severe Repetitive Loss” designation begins the clock again for the property. Think of it this way, you want the full reward for your compliance. FEMA needs to reward you for following their guidelines. You have protected your property according to their recommendations from future potential flood damage. 

My recommendation is to make certain you are working with an agency with flood insurance expertise, such as Tim Carty at Murphy Carty Insurance.  Don’t be afraid to get a second opinion.

Tim’s Flood Savings Tips
Winning the lottery?

How to win the lottery? Roll the dice. Roll the dice. Maybe you can win by saving money on your flood insurance.

 
Maybe it is time to consider private flood insurance? Private flood insurance is often less expensive than NFIP for a standard policy. I might find a property on the fringe of a flood zone that must be written in the more a costly zone with NFIP/FEMA where a private flood might read in a lower-risk zone. A few times a year, I find someone savings in excess of $10,000/yr. It happens. Lottery winner: Private flood.

Sometimes a policy is rated incorrectly, or might have an unapplied elevation certificate, or one that was applied incorrectly, and its works in an insured’s favor. Winner again. (You only use an elevation certificate if it helps the situation.)
Continuous coverage can bring savings: one last year brought savings of more than $4,000 to then find a private policy for under $1,900 the next year. A double bonus winner.

Significant improvements can reduce flood exposure, and flood cost … possibly thousands…Win again.

Finding a grandfathered policy and understanding how much it is saves by showing a current quote and comparing zones: from the very expensive VE to the almost as expensive AE to cheap C and bargain B zones… Carry on winnings.

I cannot guarantee miracles exist for everyone, but there is nothing wrong with reviewing and ‘turning over a few rocks’ to see if you might win the lottery by saving money on flood insurance. Changes are occurring all time. Maybe today is your lucky day…