Who doesn’t want to lower the cost of… everything? Flood insurance is one of those things where consumers might feel a little helpless because most flood insurance is issued through the Federal Emergency Management Agency (FEMA) so the rates are what they are. First, find a knowledgeable agent that really knows the National Flood Insurance Program. Second, check out our list of the top 5 ways to lower your premiums.
#1 Get an Elevation Certificate
Flood insurance is based on the flood zone you are in and how much water will get into your house. An Elevation Certificate is an official document that measures how much water will get into your house by calculating the elevation of the floodplain and the elevation of your structure. If you don’t know how much water will get in your house, the worst is assumed and you pay higher rates. It could be that only a foot or two of water will get in the home and as a result your rates will be drastically reduced. In many cases the premium can be cut in half or more depending on the flood zone you are in.
#2 Get a Letter of Map Amendment (LOMA)
A Letter of Map Amendment (LOMA) is an official FEMA document that changes the flood zone for your structure. It can move you from a high-risk zone to a low-risk zone and give you the official federal documentation to prove it. Once in a low-risk zone, you can reduce your premiums by up to 90% or more by getting a Preferred Risk Policy. Alternatively, with a LOMA you can drop the mandatory insurance altogether. See our blogs about dropping flood insurance, and discuss it with your agent to make sure it’s the right decision for your property.
#3 Structural Improvements
In some cases, there are structural improvements you can make to reduce flood insurance costs. Flood vents, for example, reduce the pressure from the forces of flood water and can help. So can elevating the lowest floor of the structure above the flood. This is going to lower your premium and protect your property.
#4 Community Involvement
Get involved with the community’s flood management program and make sure your maps are based on the most current community developments. Sometimes FEMA is a little late updating maps and community changes may not be reflected on your map causing you to pay higher rates. Also, make sure your community is part of the FEMA Community Rating System because participation can lower rates for everybody in the community by up to 45%!
#5 Compare Rates
Since 1968 there has really been only one option for flood insurance in the US, and that’s through the National Flood Insurance Program within the Federal Emergency Management Agency. With one supplier, there isn’t much price shopping you can do. But recent changes in the flood insurance market and new federal legislation has opened the door to private flood insurance carriers. Search the Internet for private food insurance carriers and see if your lender accepts that coverage and if it works for you.
The cost of flood insurance depends on your flood zone, the elevation of the home and the ground around it, the type of construction, when the structure was built, when FEMA flood maps were created, the contents in the structure, the height of the 100-year flood, and the history of flood risk. The best plan is to talk to a knowledgeable agent that knows your options. With this top 5 list, we hope you can get the best rate possible to protect your property and your family.
And if there’s anything we can do to help, please drop us a line.