The Benefits of Flood Insurance

The Benefits of Flood Insurance

What Protection Does it Offer?

A standard homeowners policy does not cover damages from flooding. A separate flood policy is needed to cover losses to your property caused by flooding, which provides coverage for things such as:

  • Structural damage
  • Furnace, water heater and central air-conditioning
  • Flood debris clean up
  • Electrical and plumbing systems

Cost of Coverage

As a homeowner, you can insure your home for up to $250,000 and its contents up to $100,000. For this $250,000/$100,000 building and contents coverage, yearly premiums average $405 in low- to moderate-risk areas. If your home is located in a high-risk area, talk to the professionals at Peoples First Insurance Services, LLC to determine your premium.

While it is up to the property owner to decide if they want to cover the building, if you are a renter, you can cover your belongings up to $100,000.

Stay Protected

Flood insurance means you’ll be reimbursed for all of your covered losses. As long as your community participates in the National Flood Insurance Program (NFIP), you’re eligible to purchase flood insurance.

In general, a policy does not take effect until 30 days after you purchase flood insurance. However, if your lender requires flood insurance in connection with the making, increasing, extending or renewing of your loan, there is no waiting period.

For more information on flood insurance, including premium costs, levels of coverage and the flood risk for your area, visit or contact Peoples First Insurance Services, LLC.

Water Losses and Flood Damage

For your losses to be covered under a flood insurance policy, the following definition of a flood applies:

“A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from: overflow of inland or tidal waters; and unusual and rapid accumulation.”

Federal Disaster Assistance

Federal disaster assistance is only available if the president formally declares a disaster. Even if you do get disaster assistance, it’s often a loan you have to repay with interest.

National Flood Insurance Changing

Government Announces Changes to the National Flood Insurance Program

The Federal Emergency Management Agency (FEMA) is expected to unveil significant changes to the National Flood Insurance Program (NFIP) on March 25, 2019. The changes, which alter the way homeowners are charged for flood risks, could go into effect as early as April 1, 2020.

These changes represent some of the most significant reforms to the NFIP—a program that has gone largely unchanged since the 1970s. While the reforms are expected to help communities better plan for extreme weather, they could increase premiums for homeowners in high-risk areas.

An Overview of the Changes

The most significant change to the NFIP relates to how risk is calculated for insurance buyers. Historically, flood insurance prices are set based on whether or not a home is inside the 100-year floodplain. That will all change when the government rolls out its pricing changes—changes FEMA is dubbing Risk Rating 2.0.

Under the Risk Rating 2.0 initiative, premiums will be tied to the actual flood risks facing individual homes. FEMA will leverage private-sector data to assess flood threats per home and set prices accordingly.

In addition, FEMA will incorporate the cost of rebuilding a structure into its insurance rates. What’s more, the new system will take into account a wide range of variables, including the potential impact of different types of flooding and a home’s distance to a coast or river.

FEMA has said that, following these changes, homeowners will see insurance rates that more accurately reflect their potential flood exposures. This means that properties with the highest risks will pay the most, which is important when you consider that flood claims often outpace premiums, burdening the NFIP with $30 billion of total debt in 2017.

With the changes, 5 million policyholders under the NFIP will likely see rate changes. While some individuals may have lower rates, those with homes in risky areas are likely to see higher insurance costs and diminished property values.

FEMA has said they are evaluating ways to minimize the financial burdens of the new system, including phasing in the program to help transition policyholders. In addition, Congress has already set limits on how much FEMA can increase premiums.

How is El Nino Impacting The South East

El NinoEl Nino actually isn’t all that bad like most of us think. The global impacting climate cycle know as El Nino will bring a cooler, wetter climate to our area helping to reduce hurricane activity in the Atlantic and wildfires.

However, there will be increased chances for severe storms throughout the winter along with greater chances of flooding.

Homeowners and Businessowners Insurance does NOT cover flooding! There is a 30-day waiting period before flood insurance goes into affect, so don’t wait.

With an increased chance of flooding this spring now is the time to either add a flood policy or update an existing policy. Even just 2 inches of water can cause in excess of $20,000 in flood damages!

If you have questions about flood insurance we can help 850.770.7047