November 17, 2016
Commercial Private Flood Insurance is a serious option for owners of Apartment Buildings. The cost savings combined with flood coverage should be discussed with an experienced independent insurance agent.
Own a Apartment Building and Want to Save on Flood Insurance?
Considering Cheaper Flood Insurance for a Commercial Building?
Can you purchase Non Admitted Flood Insurance for a Commercial Structure?
Commercial Insurance, distinct from personal insurance, is in that the flood insurance is for commercial purposes. Commercial loans as with personal loans tend to require flood insurance if the building is located in a high risk flood zone. These Flood zones are usually zones A and V. Examples of Commercial properties include: Apartment Buildings.
If you are the building owner of an apartment complex and have a loan you probably need both a Building Insurance Policy to cover you from liability and property danger from things like fire and Flood Insurance. Too many insurance agents are not aware that there is currently other options for flood insurance.
I have written many times before about the options that people have when purchasing flood insurance. For years the only flood option you had was from FEMA, via the National Flood Insurance Program. FEMA sits under the Department of Homeland Security. NFIP policies are sold and administered through various household named insurance companies. Your flood insurance may list company A, but more than likely it is written on FEMA insurance paper.
However, now you have other options. As the price for flood insurance has become more and more expensive, a few options have emerged. For residents of California, the options are considered Non Admitted in nature. Private Flood Insurance could potentially save you money. Sometimes its a lot of money, sometimes its just a little bit.
What is Non Admitted Insurance?
Non Admitted insurance is insurance that is not ruled and regulated by the given insurance district it is being sold in. If you procure Commercial Private Flood Insurance you should be aware of the significant differences that exists between NFIP flood insurance and non admitted flood insurance.
What are the Differences? Here are a few:
-Not backed up by the State Guarantee Fund.
-Not ruled and regulated by the California Department of Insurance.
-Loss of potential grandfathering rules/exceptions/etc from staying with your current NFIP policy.
-No guarantee of year over year placement. In other words there really is nothing to guarantee that Non Admitted Flood Company A will offer to renew the policy the following year.
-Possibly a Service of Suit Clause. What is a service of suit clause? A service of suit clause is a statement potentially limiting the location of where you can file a claim against the insurer. This is an extremely important limitation that should be reviewed if indeed it is found in your flood policy. Non Admitted insurance policies written through various lloyds syndicates may have them but they are often buried deep in the policy language.
“service of suit clauses can be buried deep in the policy language”
Private Non Admitted Flood Insurance may cost less than FEMA Flood Insurance or it may not. It depends on a variety of factors. Often the difference can be if the property does not have an elevation certificate and one is required by an NFIP policy.
Is Commercial Private Flood Insurance Cheaper?
Commercial Private Flood Insurance is not necessarily cheaper, however, I would generally say it is less expensive. There is of course no guarantee.
Will Commercial Private Flood Insurance write my property?
Perhaps, there are underwriting standards that need to be met in order to complete the process. However, an expert agent can assist you.
How will I know if I Can Save Money?
A Completed Quote will confirm if we can save you money with Commercial Private Flood Insurance.
How Long Does the Process Take?
Typically the process to get a quote, fill out the application, and submit the application can take several days. However it is not all that complicated. The process to quote out the risk can be just under 20 minutes if you have all of your paperwork ready.
What paperwork will I need for a quote?
You will need your current Flood Insurance Declaration Page, Your Loan Information, and General Information as it relates to your building.
What Paperwork will I Need to Complete a Commercial Private Flood Insurance Application?
Generally you will need your past flood declaration page, loan information, a signed application, signed quote, payment, and any other special documents requested by the underwriters.
Just Because Commercial Private Flood Insurance Can Save Me Money, Should I Switch?
Just because a non admitted insurer can save you some money does not mean that you should switch. Careful consideration by the owners of the property should be taken. In general if the savings afforded by the program is minor one should probably not make the move. However, if the cost savings are dramatic, it may make sense. Owners of commercial properties will need to make their own decisions concerning this. For more information on Flood Insurance for California Apartment owners, consider reading this.
Flood Insurance, NFIP or Private is complicated business. The decision to move can be made easier if you know the numbers. Understanding the exact differences in coverage form and type is also not intuitive. Often I find that clients just “trust their insurance agent.” This often, can be flattering, but obviously it really depends on the quality of the agent. I generally suggest to clients that they need to understand a bit about all of their insurances and take the time to ask your agent intelligent questions. Contact a specialist to review your options.
Reading about insurance online is not a suitable replacement for speaking with a licensed, insured, and bonded independent insurance agent in your state or jurisdiction. Marindependent Insurance Services LLC is regulated by the California Department of Insurance, California License: 0K10734. #floodinsurance #privatefloodinsurance