Why Should I Consider Flood Insurance?
Flood damage can happen to you, no matter where your home, apartment or business is located. You can buy flood insurance even if your property is not located in a flood plain. Mortgage lenders, pursuant to federal law, may require homeowners to purchase flood insurance.
Flood insurance can be purchased through licensed property and casualty insurance agents in Pennsylvania to cover almost any building and its contents, including rental property and condominiums. Tenants can buy protection for their belongings as well.
I Have Homeowners/Renters Insurance. Am I Already Covered?
No. It is important to be aware that a standard homeowner's or renter's policy does not cover damages resulting from a flood. Remember there may be a waiting period for your flood policy to take effect. For example, there is a 30-day waiting period for National Flood Insurance Program (NFIP) flood insurance policies to become effective.
The Federal Emergency Management Agency (FEMA), which administers the NFIP, has many educational pieces to help consumers understand the basics of flood insurance, how to protect your home and what to do if, in fact, you are the victim of a flood. In most cases, the information on FEMA's Web site is available in English, Spanish, and other languages.
How Can I Buy Flood Insurance?
Although flood insurance has traditionally only been available to homeowners or renters through the National Flood Insurance Program (NFIP), today there are more options for consumers to consider. Flood insurance is now available through private insurers, including surplus lines insurers. Surplus lines coverage is insurance that is provided by an insurer that is not licensed in the insured's state.
When purchasing flood insurance, it is important for consumers to consider the kind of coverage that they need. Insurers write different types of flood insurance policies: dwelling - the structure of your home, and contents - your personal property within the dwelling.
What Should I Know About Private Insurance?
Many consumers now have the option of purchasing flood insurance through private insurers. Consumers can purchase private flood insurance through providers licensed in Pennsylvania, or through surplus lines carriers. If you have NFIP coverage now and choose to pursue private coverage, your premium could increase significantly if you choose to return to the NFIP later. Also, you may be precluded from certain hazard mitigation grant programs available through FEMA and the NFIP if you choose private flood insurance to insure property located in an area that is prone to flooding.
What Should I Know About Surplus Lines Insurance?
A surplus lines insurer or company is an insurance provider not licensed in Pennsylvania. They are licensed in the state in which the insurer is based and must be authorized to sell surplus lines policies in Pennsylvania. There are benefits and risks associated with getting surplus lines coverage. Some mortgage lenders may be less willing to accept a surplus lines issued flood insurance policy than a policy issued under the National Flood Insurance Program. There is no Guaranty Fund protection with surplus lines insurance. The Guaranty Fund is like FDIC insurance for bank accounts. If your insurer is unable to pay your claim, the Guaranty Fund will pay it. However, the department does monitor surplus lines companies to ensure their ability to pay claims.
For consumers who may have been redrawn into flood plains, or whose property is only partially in a flood plain, surplus lines policies may offer significant savings. For consumers whose properties fall well within flood plains or pose a high risk of flooding, the NFIP may be the only option.
The Insurance Department advises consumers to speak with their lenders to ensure that they are willing to accept a surplus lines policy.
I've Been Redrawn into a Flood Zone. Now What?
If your home has been drawn into a flood zone and you believe it to be in error, you can appeal the decision by calling 1-877-FEMA-MAP or visiting the FEMA website (https://www.fema.gov). To appeal your home's placement in a Special Flood Hazard Area (SFHA), you must show that the lowest adjacent grade, or the lowest ground touching the structure, is at or above the Base Flood Elevation, the level to which water is expected to rise in the 100-year flood projection FEMA uses to designate SFHAs. It is the homeowners' responsibility to provide this information to FEMA in written form, but there is no charge to the consumer for this Letter of Map Amendment. However, you will likely need to hire a professional to determine whether the Lowest Adjacent Grade is above the Base Flood Elevation.