March 2, 2017
Apartment Building Private Flood Insurance is typically required of buildings that carry a mortgage and that are located in high hazard flood zones. By FEMA definitions these flood zones basically include the A and the V zones. There are variations of these two types of flood zones, but essentially if your building is in one of the types of flood zones, you probably then will be required to carry flood insurance.
Most flood insurance is sold and serviced in the United States and run through the National Flood Insurance Program. The National Flood Insurance Program is administered through the US Federal Government and the Department of Homeland Security. FEMA runs the program through this Department. Most Carriers in America sell the policy on NFIP paper. It may be sold by your local agent, but in the end the Feds are the ones writing a check on a claim. The Government then creates the underwriting rules and regulations and sets the pricing.
Most Flood Insurance in the United States is written through…FEMA
In recent years NFIP flood policies have seen a surge in premium costs. Clients have come to be me, telling me that their apartment building is 6 or 7 times more expensive to insure than it was when they purchased the policy. With all of the increased premiums a small window opened up for private companies to enter the market.
Now many apartment owners have another option.
Private flood insurance is simply insurance written by companies other than the federal government. Flood Insurance not backed up by the federal government. However, most property insurance as in Homeowners, Commercial property is already written by private insurance companies and are also not backed up by the feds.
Private flood has seen steady growth in the past five or so years. Now it is offered for Commercial Apartment buildings as well as private homes. Since many apartments can be required to carry the $500,000 maximum limit, rather than the $250,000 for homes, the cost savings can be even greater.
Apartment Building Private Flood Insurance is different in a couple of ways:
Apartment Building Private Flood Insurance is similar in a couple of ways:
Of note with these similarities and differences. These are based on my experience selling both NFIP and Private Market flood insurance in California. It is of course possible that other private market flood insurance policies exist that I have not seen and or reviewed which could be different than these.
Should you consider it? Sure. Should you purchase it? It depends.
In order to make just about any insurance recommendation, we know where we are starting from. Are you deeply grandfathered into the NFIP program? Have your rates been going way up? Do you have an elevation certificate? Have you been newly mapped into a high risk flood zone? What are you current rates? You building characteristics and claims history. We would want to run the numbers for the apartment building numbers to get a full handle on your options. Can the private flood insurance policy save you money? Over the short term and long term?
Thank you for reading Apartment Building Private Flood Insurance.
You will notice in the Different/Same section I used some general terms to qualify. That is because not all private flood insurance is the exact same. Unlike NFIP policies which are. I have a couple of vendors that I have used over the years. One of which, basically has the same insurance policy as the NFIP, but it is not backed up by FEMA. Another vendor, ahs a different set of rules qualifying what is and is not considered a flood. One of them is more restrictive of entry, more limited definition, but often the least expensive Another is much more open to whom they will accept. Some agents may have no experience selling these policies and other agents experience with only one.
In some states the only private flood insurance option that may be available to you is Non Admitted in nature. You will want to speak with your licensed agent in your jurisdiction about this. Since we only write flood insurance in California, we would walk you through this and explain it all to you. For more about flood insurance read All About Flood Insurance in California.
Marindependent Insurance Services LLC – 0K10734 – 415-294-5454. A California Independent Flood Insurance Agency. We are P&C licensed exclusively in California.