Tag flood insurance

The information below was copied directly from the NFIP website on Thursday, February 8, 2018. Here is how a government shutdown could affect flood policyholders:

Congress must periodically renew the NFIP’s statutory authority to operate. On January 22, 2018, the President signed legislation passed by both houses of Congress that extends the National Flood Insurance Program’s (NFIP’s) authorization to 11:59 pm on February 8, 2018.  The legislation also authorized FEMA to honor all policy-related transactions inadvertently accepted between January 20, 2018, and January 22, 2018.

Congress must now reauthorize the NFIP by no later than 11:59 pm on February 8, 2018.

FEMA and Congress have never failed to honor the flood insurance contracts in place with NFIP policyholders. In the unlikely event the NFIP’s authorization lapses, FEMA would still have authority to ensure the payment of valid claims with available funds. However, FEMA would stop selling and renewing policies for millions of properties in communities across the nation. Nationwide, the National Association of Realtors estimates that a lapse might impact approximately 40,000 home sale closings per month.

As affected communities recover from the devastating impacts of the 2017 hurricanes, a timely, multi-year reauthorization is critical for insured survivors and businesses. Policyholders need confidence not only that FEMA can pay flood insurance claims, but also that the NFIP will be able to sell and renew policies to help them protect against future flooding. Flood insurance – whether purchased from the NFIP or through private carriers – is the best way for Americans to financially protect themselves from losses caused by floods.

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AIUA recently announced significant changes to their homeowners insurance policies which will become affective June 1, 2016. AIUA has typically been seen as the “insurer of last resort” due to the majority of their lower premium programs being offered having an Actual Cash Value, or ACV, settlement method. An ACV settlement method means the insurance company will pay you the depreciated value of your property (home, contents) in the event of a claim. That means that many property owners would not be able to afford to pay to rebuild or repair their homes in the event of a storm because the depreciated value is so much lower than the actual cost to repair or replace. Alabama Department of Insurance Commissioner, Jim Ridling, was quoted as saying: “If you drive from here to New Orleans, you get a good view of what happens when people cannot afford to rebuild. There are still abandoned homes, slabs, blue tarps and abandoned businesses from the Mississippi border to New Orleans. I do not want that to happen in the state of Alabama when we have a storm.”

The more favorable settlement method, and that used most often sold by SSIA is the Replacement Cost Value, or RCV, settlement method. This settlement type pays you for the cost to replace your property with items of like kind in the event of a claim. Check out our quick, 2-minute video which describes the two settlement types.

The policy changes which AIUA has just announced will provide policyholders with the option of purchasing the RCV settlement method for a smaller fee than previously offered, however the coverage the AIUA policies offer is still very limited as compared the policies that can obtained through the many carriers writing coverage along the coast. SSIA’s experienced agents can walk you through the benefits of obtaining better coverage while also finding you the best rates available with an RCV settlement method. Don’t let your property go under-protected, as the cost savings you see now may come back to haunt you in the form of high deductibles or inadequate settlement payment after a storm.

Why wait until June to look at changes? Obtain a fast, free, real-time insurance quote in just 5 minutes or less with no personal information via our online quote portal: www.ssiaquote.com.

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South Shore Insurance Agency is proud to announce our recent appointment with Safeco Insurance.Safeco Insurance

Originally founded in 1923, Safeco Insurance is an industry leader, providing comprehensive personal lines insurance products, including homeowners insurance, as well as auto, boat and RV insurance, at competitive prices. SSIA is proud to offer Safeco products to our customers because they share our mission – to not just provide the best product options at the best price, but to help educate and grow with our customers as their lives and needs change.

Contact one of our agents today to learn more about insurance options with Safeco Insurance – 251.923.4463 or email them directly at admin@sshoreins.com.

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TurkeySSIA is proud to once again sponsor the Great Turkey Drive. This 2nd annual fundraiser helps us raise funds to provide a turkey and holiday meal families seeking assistance through Catholic Social Services Mobile and Baldwin Counties. And SSIA will once again MATCH every donation “turkey for turkey” until we feed every family CSS serves this holiday.

Every $15 donation received provides the following to a needy family:

  • One 10-12 lb turkey
  • 2 sides of Corn
  • 2 sides of Green Beans
  • 1 side of Stuffing
  • 1 side of Cranberry Sauce
  • 1 side of Potatoes

Commitment forms are available by clicking here. Please complete the form and return as indicated by Monday, Dec. 7th via email to anne@sshoreins.com or fax to 251.923.4464.

Cain’s Piggly Wiggly has been kind enough to provide all products purchased at cost for this year’s Turkey Drive. Please try to support them with your patronage.

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The Federal Emergency Management Agency (FEMA) has placed more than 20,000 communities in the United States into a category of flood zones. Each community is able to participate in the agency’s National Flood Insurance Program (NFIP), with premium rates determined by the risks of flooding. To indicate the risks in different parts of the country, FEMA has assigned a character from the alphabet to each zone.

The most hazardous flood zones are V (usually first-row, beach-front properties) and A (usually, but not always, properties near water).

V Zones

According to FEMA and the National Flood Insurance Program, any building located in an A or V zone is considered to be in a Special Flood Hazard Area, and is lower than the Base Flood Elevation. V zones are the most hazardous of the Special Flood Hazard Areas. V zones generally include the first row of beachfront properties. The hazards in these areas are increased because of wave velocity – hence the V designation. Flood insurance is mandatory in V zone areas.

Living in a V Zone

If your home is in a “V” zone (this includes VE and V-1-V-30), adhere to the following recommendations:

  • • The bottom of the lowest horizontal structural member of the lowest floor elevation must be at or above the Base Flood Elevation (BFE).
  • • Enclosed areas below the lowest floor cannot be used for living space. The building must be elevated on piles, piers, posts or column foundation.
  • • Electrical, heating ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE.

A Zones

A zones – the next most volatile of the Special Flood Hazard Areas – are subject to rising waters and are usually near a lake, river, stream or other body of water. Flood insurance is mandatory in all A zones because of the high potential of flooding. A-zone maps also include AE, AH, AO, AR and A99 designations, all having the same rates. The different A zones are named depending on the way in which they might be flooded.

Living in an A Zone

If your home is in an A zone (includes AE, A1-A30, AH, AO, AR) follow these important recommendations:

  • • Enclosed areas below the lowest floor cannot be used for living space.
  • • Electrical, heating, ventilation, plumbing, air conditioning equipment and other service facilities must be elevated to or above the BFE.

Other Zones

  • • X zones are minimal-risk areas where flood insurance is not mandatory.
  • • D zones are areas that have not been studied, but where flooding is possible.

Finding Your Zone Information

There are several ways to find out which zone applies to you. You can determine your risk online by visiting floodsmart.gov. You can also go to your town hall or city hall, where employees responsible for issuing building permits in your area have access to flood zone maps. If you are buying a home, your Realtor and your insurance agent should be able to help you. Also, you can view your flood map by visiting the FEMA Map Service Center website at http://msc.fema.gov or by calling (800) 358-9616.

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5029344-money-concept-showing-us-dollar-sinking-in-waterIn last week’s post, we discussed the different flood zones and what they mean for your property.  Remember, all properties and homes in the US are in a flood zone.  Here is a quick refresher of the three current flood zones:

  • An “X” zone is considered non-hazardous and lenders do not typically require flood insurance in these areas. “X” zones are supposed to have less than a 1% chance of flooding each year.
  • “AE” zones are considered moderately hazardous, and lenders will typically require that flood insurance be obtained in these zones.
  • “VE” is considered the most hazardous – high-velocity or high-risk, and a lender will typically require flood insurance be obtained in these zones. These coastal areas have an additional hazard associated with storm waves, and have a 26% chance of flooding over the life of a 30-year mortgage.

Once you determine your property’s flood zone, you and your agent can determine the cost of coverage.

Coverage in “X” zones will run approximately $400 +/- per year depending on the size of your home.

In an “AE” zone, homes built to a positive elevation or with proper flood venting (more on that in a minute) will cost approximately $500 – $600 per year.  Homes built to a negative elevation could cost as much as $2000 per year, or more.  Beware – a full or partial enclosure under an elevated home can cause the home to be rated at a negative elevation.

In a “VE” zone, homes built to a positive elevation will typically run between $2,000 – $4000 per year. Homes built to a negative elevation can run as high as $6000+ per year.  Beware – a full or partial enclosure under an elevated home can cause the home to be rated at a negative elevation.

When building or buying a home, you will want hire a surveyor to create an elevation certificate which will determine the elevation and flood zone of the dwelling.  Please remember that an enclosure underneath an elevated home (like a bathroom, enclosed storage room, additional bedroom, elevator, etc.) may cause the entire home to be rated at the elevation of the enclosure rather than the elevated floor.  So while that elevator may be a great convenience for moving groceries into the house, know that it can cost you significantly more in flood coverage.

Proper flood venting is also important, as this helps to reduce pressure by allowing floodwaters to move through your enclosure, thus causing less damage from a flood event.  Breakaway walls for enclosures (as opposed to fully finished walls with studs, drywall, etc.) can also be a good idea as these will simply pull away from the pilings during a flood event and not cause additional damage to the structure.

If you must have an enclosure, here are some general rules to keep you out of trouble.  In an AE zone, the square inches of flood vents should be equal to or greater than the square footage of your enclosure.  The walls should be breakaway and have less than 20 linear feet of finished wall space.  In a VE zone, your enclosure should be less than 300 square feet, made of breakaway walls, and have less than 20 linear feet of wall space.  While flood vents may help to reduce damage in a VE zone, they do nothing to help reduce your flood insurance costs – only in an AE zone can they help to reduce costs.

The current maximum coverage amounts allowed through the NFIP (National Flood Insurance Program) are $250,000, for the dwelling and $100,000 for contents in a single family home; however, excess flood programs are available through other carriers such as Lloyds of London.  As always, it’s vital to have a good agent who can help to mitigate your costs and ensure your properly covered.

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Information courtesy of Selective Insurance, photos courtesy of AL.com
 

President Obama Signs the Homeowner Flood Insurance Affordability Act of 2014 

On Friday, March 21st, HR3370, also known as the Homeowner Flood Insurance Affordability Act of 2014 was signed and approved by President Obama. This bill introduces changes to the NFIP (National Flood Insurance Program) that would address some of the unintended consequences resulting from the implementation of the Biggert-Waters Reform Act of 2012 (BW12).

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Some of the major elements that Homeowner Flood Insurance Affordability Act of 2014 looks to address include:

• Preventing FEMA from raising average rates above 15% for a class of properties and above 18% on individual policies per year.

• Rescinding provisions in BW12 requiring policyholders to pay the full-risk rate for Pre-FIRM properties at the time of purchase.

• Rescinding provisions in BW12 requiring Pre-FIRM property owners to pay the full-risk rate if they voluntarily purchase a new policy.

• Rescinding provisions in BW12 terminating grandfathering.

• Requiring FEMA to refund policyholders for ‘overpaid’ premiums.

 

At this time, FEMA and the NFIP are actively working to analyze the changes this new law brings and determine how each element will be implemented, however industry analysts believe it may take 12-18 months to implement those changes and to begin issuing any refund checks.

SSIA will continue to monitor updates to this program, and share them here and on our social media sites.

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Legislation passed in House aiming at BW12 reform

On Tuesday, March 4, 2014, the US House of Representatives passed legislation aimed at reforming some of the changes mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12).  This new legislation is known as HR 3370, the Grimm-Waters bill, and while it has similar intent to the bill that the US Senate passed on January 30th, there are some key differences.  The proposed Grimm-Waters bill:

  • Prevents FEMA from raising average rates above 15% for a class of properties and above 18% on individual policies per year.
  • Rescinds provisions in BW12 requiring individuals to pay the full-risk rate for Pre-FIRM properties at the time of purchase.
  • Rescinds provisions in BW12 requiring Pre-FIRM property owners to pay the full-risk rate if they voluntarily purchase a new policy.
  • Rescinds provisions in BW12 terminating grandfathering.
  • Requires FEMA to refund policyholders for ‘overpaid’ premiums.

For a full summary of the proposed bill, please click here.

Please note, the Grimm-Waters bill must still be reviewed and voted on by the US Senate and then ultimately needs to be signed by the President prior to becoming law.

About Biggert-Waters Flood Insurance Reform Act (BW12)

In July 2012, the U.S. Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) which calls on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the National Flood Insurance Program (NFIP) is run. Some of these changes already have occurred, and others will be implemented in the coming months. Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders. The changes will mean premium rate increases for some—but not all—policyholders over time. Homeowners and business owners are encouraged to learn their flood risk and talk to their insurance agent to determine if their policy will be affected by BW-12.

To learn more about BW12, click here to visit FEMA.gov.

We will continue to monitor the progress of these bill changes and will update our newsfeed as needed. Contact your South Shore Insurance (SSIA) team for any questions about your flood insurance policy.

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From an article posted January 30, 2014 at 10:55 AM by The Associated Press on al.com

WASHINGTON (AP) — Hundreds of thousands of homeowners facing big flood insurance premium increases would see those rate hikes delayed for years under legislation that’s set to pass the Senate.

The bipartisan legislation comes amid protests that it would undo hard-fought reforms passed less than two years ago to stabilize the government’s flood insurance program.

The legislation scheduled for a vote Thursday would delay for up to four years huge premium increases that are supposed to phase in next year and beyond under new and updated government flood maps. It also would allow homeowners to pass below-cost policies on to people who buy their homes. People who have recently bought homes and face sharp, immediate jumps in their premiums would see those increases rolled back.

The measure faces a rockier climb in the GOP-controlled House, where Speaker John Boehner, R-Ohio, and Financial Services Committee Chairman Jeb Hensarling, R-Texas, prefer a more modest approach.

At issue is the government-run flood insurance program, in which taxpayers and other homeowners subsidize below-risk rates paid on older homes in both coastal areas threatened by hurricanes and big storms and inland areas near flood-prone rivers. A sweeping overhaul that passed virtually unanimously in 2012 was designed to make the federal flood insurance program more financially stable and bring insurance rates more in line with the real risk of flooding.

Opponents of the new legislation says it essentially unravels reforms to the much-criticized flood insurance program that put taxpayers on the hook for $24 billion in losses by subsidizing ownership in risky areas. The changes were aimed at making the program more financially sound and to quit requiring homeowners in less risky areas to essentially subsidize below-market insurance rates for homeowners in locales more at risk of flooding.

However, projections of what the new rates will be have caused anxiety among hundreds of thousands of homeowners. The loss of subsidies when homes are sold has put a damper on the real estate market and threatened home values. Some homeowners are caught in a Catch-22. They face rates that, once phased in, they won’t be able to afford. But because of the higher insurance rates, they also face having to sell their properties at distressed prices.

For instance, a North Dakota couple, Allison and Kyle Skari, bought a home in Grafton a year ago and initially paid $901 a year for $100,000 of coverage. They were hit with a $4,200 bill now and tell Sen. Heidi Heitkamp, D-N.D., that they never would have bought the home. They’re ineligible for a phase-in of the higher premium because they bought after the 2012 law was passed, but would get relief under the Senate bill.

The Senate measure would delay many of the changes and is likely to pass after votes on a host of amendments. One, by Sen. Pat Toomey, R-Pa., would proceed with the premium increases but cap them on most properties — including homes being sold — at 25 percent per year until the premium reflects the true flood risk. If faces almost certain rejection, though Toomey said it lines up with what the Obama administration wants. The administration said in a statement it “strongly supports a phased transition to actuarially sound flood insurance rates.”

There’s no relief in the offing for 1.7 million owners of second homes, who are not covered by the Senate bill and who face annual 25 percent increases — provided they owned their home before Congress overhauled the program in 2012. They say the premium hikes threaten the viability of older beachfront towns.

The program helps 5.6 million policyholders, 20 percent of whom receive subsidized policies for older homes built before communities joined the flood insurance program

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