Flood or no flood

[fed up]

Let me start by saying that I hate flood insurance. I hate discussing it, I hate selling it. I realize that there is a need but have seen too many good insurance companies dragged through the mud because the policy purchased was not what the insured needed and it was not explained properly but it is always the company's fault. I would rather that my clients purchase flood coverage through their mortgage company or local bank before asking me to write the policy. My question is this: I look at a property policy which has a separate flood policy and look up the address on the flood map. I see a house at the top of the hill which would appear to have no chance to ever have a flood policy kick in for coverage. Looks like the lender decided that it was necessary. I never want to advise to remove something that the customer has in place and is happy with. do I move along or contact the customer and discuss what needs to happen before the flood policy kicks in?

 

[mplsmm]

You will be seeing more as various lenders require them like USDA. It's a way to prop up govt. That being said, my mom is in the FEMA and people really just envision waters up to their waist when they hear flood. It can be a flood with an inch of water, the ground can get really saturated and overwhelm a home that is high up. I have renters on the 2nd floor that have been through a flood and know how bad it can get and have flood insurance. It is based on risk so low risk homes are cheaper. I never advise anyone not to take it or talk them out of it, 20% of all floods are in low to moderate risk areas. I don't want an E&O claim so I am careful. You would be shocked at some places my mom gets called to. Sometimes it's just three or 4 houses. She spent 6 months in what I thought was a high ground area for 9 houses on a cul de sac. It didnt make the news and no one heard about it. You can look up a lot of statics on the Fema or NFIP sites, I show it to the students in my classes on homebuying. Look at your county and how many flood claims there were and the average paid out, then how many active flood policies there are.

 

[fed up]

You will be seeing more as various lenders require them like USDA. It's a way to prop up govt. That being said, my mom is in the FEMA and people really just envision waters up to their waist when they hear flood. It can be a flood with an inch of water, the ground can get really saturated and overwhelm a home that is high up. I have renters on the 2nd floor that have been through a flood and know how bad it can get and have flood insurance. It is based on risk so low risk homes are cheaper. I never advise anyone not to take it or talk them out of it, 20% of all floods are in low to moderate risk areas. I don't want an E&O claim so I am careful. You would be shocked at some places my mom gets called to. Sometimes it's just three or 4 houses. She spent 6 months in what I thought was a high ground area for 9 houses on a cul de sac. It didnt make the news and no one heard about it. You can look up a lot of statics on the Fema or NFIP sites, I show it to the students in my classes on homebuying. Look at your county and how many flood claims there were and the average paid out, then how many active flood policies there are.

But it is only a flood if it is declared a flood and only if it affects 2 or more properties. Most homeowners do not understand, or take the time to understand, the difference between a standard policy and a contents policy. I'll never talk someone out of it but I can defer to someone else to write it. Just because water comes from outside of the home does not make it a flood. I can avoid the E&O and the hassle of the unpaid claim by not writing paper for the US govt.

 

[mplsmm]

There are so many people that specialize in flood, you don't have to worry about it. I have no idea why anyone would want to specialize in it. It's over complicated. I think the govt will eventually make it mandatory on all VA loans and any other govt backed loan to shore up nfip and FEMA. It will be like healthcare. Maybe the banks and mortgage companies will add flood coverage automatically and charge for it on all loans. They are the ones that lose when people walk away from a flooded home. I hated the govt nfip sites. I use progressive flood now. They combine the contents and structure into one policy. As always, the people that should have it won't buy it and will expect a bailout.

 

[marindependent]

My experience with Flood Insurance is that the NFIP policy could be fairly complex and the new 2.0 has changed much of what I learned.

Even within NFIP though - a lot of the confusion/complication comes down to the underlying carrier and their website. Some are better and easier to use than others. TRUST ME. If you yourself are looking at floodmaps or having to call someone - you are using the wrong tools.

In addition The new private non admitted flood market insurers sites are pretty streamlined. I have one that asks no more than say 12 questions and can pump out a quote in less than 3 minutes in most situations.

Lastly in the old rating system - and this may [or may not] apply to you @fed up but there used to be lots of situations where there were competing Flood Zone Certificates, one from a bank that said it was in an "A "and mine that said it was in an "X". The situation could even go so far as to issue the policy that indicated that it was an "X" zone whereby the bank would come by and refuse to accept it because they believe it in an "A."

The short version here is that every good agent should be using [and or looking for] more streamlined flood insurance offers. If for no other reason than to offer a flood estimate to all of your personal lines clients to say here - here is my estimate for flood insurance.

 

[marindependent]

I have no idea why anyone would want to specialize in it. It's over complicated.

The ones that specialize in it are the ones that want you to think its super complicated. 95% of flood insurance policies do not have to be complicated. You are either not knowledable or not using the right tools or perhaps you are in a state that just does not have a lot of options. That all being said my basis for all of this is in 1.0 - we shall see how "Equity in Action" all turns out now.