As a society, we have grown accustom to having options. With the growth of available options in nearly every area of life, we have developed a preference (and expectation) for choices and speedy delivery. Therefore, it’s no wonder that the flood industry would be any different. Property owners want more than the standard, cookie-cutter government issued flood policies and thus, the creation of private market flood options occurred.
While private market flood insurance has been hailed by some sources as the “fix-all” for flood insurance, there are many options that property owners and insurance professionals should consider before making a market selection.
1. Do you need specialized flood insurance coverage?
Consider what coverages you will need on your flood policy. Are you using the property as a rental? Will you be occupying the property and need coverage for your personal effects?
Private flood insurance enables property owners to supplement the NFIP product, providing coverage that homeowners expect from their homeowners’ policies for exposures such as outdoor property, detached structures and basements.
2. Do you have a finished basement or pool?
The NFIP does not cover personal property in basements, so displaced homeowners or homeowners with built-out basements are responsible for these bills. If a storm surge dumps a ton of sand into your client’s pool, is your client prepared to shoulder the costs of the resulting clean-up? Private options can help. For example, NFS Edge offers homeowners the option for $1,000 swimming pool clean-up protection.
3. Does your property value exceed $250,000?
The value of custom-built homes continues to increase with replacement costs rising well above $250,000, the current limit on government-issued coverage. Now, owners of residential homes in lower-risk, non-mandatory flood zones have options with higher coverage limits at affordable rates through private flood insurance programs.
4. Would you need assistance with additional living expenses if you experience flood damage?
When weighing coverage options remember that the NFIP does not cover additional living expenses. With a private flood policy, you can opt to add additional living expense coverage. This valuable coverage helps homeowners who have been displaced as a result of a flood by covering the costs of shelter and meals. For instance, some NFS Edge policies offer $5,000 per occurrence in Additional Living Expenses (ALE) along with $500 in food spoilage coverage.
5. Are your personal belongings valued at more than $100,000?
Consider your property’s use. If this is a personally occupied property, you will need to consider the coverage needed for your personal property. If the property is used as a rental property, typically the amount of personal property coverage is relatively low.
6. Would you consider an application process that doesn’t require submitting photographs or an elevation certificate?
Speed of delivery and streamlined processes of today’s private flood insurance options are increasingly attractive to clients. For example, agents can often quote a private flood policy in less than a minute. In addition, some property owners may be able to obtain a quote without an elevation certificate and without providing property photographs.
7. Would you like to avoid federal surcharges or reserve fund assessments?
Private products are not subject to federal surcharges or reserve fund assessments, and they may be less expensive to purchase than NFIP flood insurance.
The Choice Insurance Agency’s mission is to help you get from where you are to where you want to be financially by planning, achieving your plan and protecting your plan from unexpected events. In the process, our goal is to deliver insurance services in a manner that exceeds your expectations. See what The Choice Insurance Agency can do for you today. Give us a call at 757-416-5100. to speak with one of the licensed, professional members of our team or request a contact here. The Choice Insurance Agency. We’re on YOUR side. 757-416-5100.
Points and details derived from “Understanding private flood insurance options” article on November 17, 2017 by John Dickson. See the full Property Casualty 360 article here.