Flood Insurance

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Flood Insurance

FLOOD INSURANCE

Flood insurance is coverage for property damage caused by flooding of tidal or inland waterways to your commercial or residential property.  Normally, Commercial Property and Homeowners policies exclude flood damage.  The most common and cost effective way to purchase flood insurance is from the National Flood Insurance Program (NFIP), which can be bought through an independent agency like Shields Insurance.

There are several types of flood insurance policies, but each is based on your property’s qualifications and whether your property is located in Special Flood Hazard Areas SFHAs (“high risk”) or Non-Special Flood Hazard Areas NSFHAs (“low risk”).

Preferred Risk Flood – Homeowners and Commercial buildings located in NSFHAs

Residential (Standard Flood) – Homeowners located in SFHAs or with claims history

Non-Residential (Standard Flood) – Commercial buildings located in SFHAs or with claims history

RCBAP (Standard Flood) – Designed for condo associations allowing unit owners to participate purchase low cost flood coverage

What is a Flood?

According to NFIP, “a flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.  Your flood risk isn’t just based on history: it’s based on many factors that include current weather patterns, natural changes in the environment, and recent development in your community.”

Preferred Risk and Standard Flood Policies

At Shields Insurance, we can run a flood determination and reveal your flood zone.  If your property is in a low risk flood area (Non-Special Flood Hazard Areas NSFHAs), like Zones B, C or X, then you may qualify for a Preferred Risk Flood policy which is the least expensive coverage.  On the other hand, if your property is located in a high risk flood area (Special Flood Hazard Areas SFHAs), like Zones A, V, AE, VE, AH, AO, A99, AR, V1-V30, or A1-A30, then your rates will vary based on Base Flood Elevation (BFE) and/or Base Flood Depth (BFD) as provided be an Elevation Certificate.

A certified land surveyor or engineer can be hired to complete an Elevation Certificate.  If you are in an NSFHA zone, but have experience past flood claims, then you may still require an Elevation Certificate and have to be rated on a Standard Flood Policy.

[Side Note: SFHAs have a 25% chance of flooding every 30 years.]

Pre-FIRM and Post-FIRM

Zones and rates are also affected by Pre-FIRM and Post-FIRM maps.  Pre-FIRM properties are those built on or before 12/31/74 or before initial FIRM date.  Post-FIRM properties are those built after 12/31/74 or after initial FIRM date, whichever is later.

The initial FIRM date is when the community (where your property is located) entered the regular flood program mapping).  Whether your property is Pre-FIRM or Post-FIRM impacts your rates and whether an Elevation Certificate is required.

WHY PURCHASE FLOOD INSURANCE?

According to a report by the Insurance Information Institute, the average flood claim in 2016 was $65K. This type of loss, if uninsured, could devastate most families or businesses. The value proposition of flood insurance makes this a compelling reason. For example, in 2016, the average flood policy limit was $246K and the average annual premium was $656.

Let's break it down!

Flood insurance is coverage for property damage caused by flooding of tidal or inland waterways.

OTHER TYPES OF BUSINESS INSURANCE

Lets Reduce Your Rates and Improve Coverage

Most people don’t understand their unique risks or their insurance and are therefore buying the wrong coverage and paying too much. If you work with our insurance agency, we will implement our simple 3-step process to identify your key exposures, improve insurance coverage and reduce rates.

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