Flood Insurance Facts (Re post from 11/23/09)

With all the flooding that has occurred as a result of Sandy we thought this might be a good time to re post an old flood insurance blog article that gives a few facts about flood insurance.

Posted November 23, 2009 on www.feyinsuranceblog.com:

Flood insurance had its fifteen minutes of fame after the Hurricane Katrina disaster in 2005. During this time period the media was making everyone well aware that flood insurance is not part of your typical homeowner policy. Today that is still the case and with this post I would like to point out a few more facts about flood insurance.

Flood insurance is run through a government program called FEMA (Federal Emergency Management Agency). You can purchase it through insurance agency such as Fey Insurance Services but the backing is from FEMA. Typically it takes 30 days for a new flood insurance policy to go into effect. The one exception would be for a mortgage closing where flood insurance is required. So you need to plan ahead. Hearing about a big rain on the nightly news and calling your agent the next day will not work. Many people think of flood insurance when they think about what is stored in their basement. Flood insurance will only cover things such as furnaces, water heaters, washers, dryers, air conditioners, freezers, pumps and utility connections. Everything else you store down there (old cloths, furniture, carpet, TV, etc) is not covered unless those items are on the first floor of your house and the flood reaches that level.

In some cases flood insurance is required in order to get a loan. If your home or a home you are about to purchase is in a 100 year flood plain (meaning at least once every 100 years your location is under several feet of water) you will be required to purchase a flood insurance policy to close on your loan.

Water In Your Basement?

This rain has caused one common phone call for our agency this spring, “I have water in the basement”. Whether it is a home, business or rental property, water has been finding its way into places it should not be; so what better topic to blog about today than water in your basement.

The first question we are asked is whether or not it is covered. This depends on a few factors. The two main factors are the source of where the water is coming from and the type of insurance policy you have. If water is coming into your basement through window wells or other opening in your basement (excluding drains), then that would be considered a flood loss which often is not covered by your normal insurance policy. In fact, even if you had a flood policy it normally doesn’t cover contents located in parts of a building that are underground, i.e. a basement. If the water is gathering in your basement because of a sump pump failure or a backed up drain or sewer than there could be coverage, as long as you meet the second factor which is having the type of policy that covers those things. Rental property policies have the most limiting coverage for water in the basement. The main coverage you need is called “Water Back up of Sewers and Drains” and many insurance companies don’t offer that on rental properties. Commercial building insurance policies have the “Water Back up of Sewers and Drains” endorsement as an optional coverage so it just depends if you purchased that option or not if you would have coverage. Homeowners polices more often than not have the “Water Back up of Sewers and Drains” included in their basic policy but if someone tried to skimp on the premium they may have taken that coverage out.

There are a few tips that we would like to let you know about as far as dealing with such a rainy spring. First, if you don’t go to your basement very often make sure that during this time of year you do take more frequent trips for inspection purposes. If you have a sump pump, check it regularly to make sure it is functioning properly. Also, make sure that drains are clear of anything that might cause blockage.

If you do have the bad luck of finding standing water in your basement make sure to give your insurance person a call. Whether it is covered or not they would have advice as to who to call for clean up. It is a good idea to try and clean the water up as soon as you can since mold can settle in after a few days. Also, if the basement is in a commercial building that stores chemicals of any kind it might be best to stay clear from the water. The water may have caused leaked chemicals to mix and could be harmful.

If you happen to be in the service area of the Metropolitan Sewer District of Greater Cincinnati you are one of the lucky few that could get free help with your water problem. Again, depending on the source of the water, they may take care of the water clean up at no cost to you. Their phone number is 513-352-4900 and their website is http://www.call.msdgc.org/.

Flood Insurance Facts (Re post from 11/23/09)

Floods have struck the Ohio area once again. We thought this might be a good time to re post an old flood insurance blog article that gives a few facts about flood insurance.

Posted November 23, 2009 on www.feyinsuranceblog.com:

Flood insurance had its fifteen minutes of fame after the Hurricane Katrina disaster in 2005. During this time period the media was making everyone well aware that flood insurance is not part of your typical homeowner policy. Today that is still the case and with this post I would like to point out a few more facts about flood insurance.

Flood insurance is run through a government program called FEMA (Federal Emergency Management Agency). You can purchase it through insurance agency such as Fey Insurance Services but the backing is from FEMA. Typically it takes 30 days for a new flood insurance policy to go into effect. The one exception would be for a mortgage closing where flood insurance is required. So you need to plan ahead. Hearing about a big rain on the nightly news and calling your agent the next day will not work. Many people think of flood insurance when they think about what is stored in their basement. Flood insurance will only cover things such as furnaces, water heaters, washers, dryers, air conditioners, freezers, pumps and utility connections. Everything else you store down there (old cloths, furniture, carpet, TV, etc) is not covered unless those items are on the first floor of your house and the flood reaches that level.

In some cases flood insurance is required in order to get a loan. If your home or a home you are about to purchase is in a 100 year flood plain (meaning at least once every 100 years your location is under several feet of water) you will be required to purchase a flood insurance policy to close on your loan.

Feel free to get in touch with a Fey Insurance Services representative to learn more facts about flood insurance or to get a quote today.

Avoiding Insurance Mistakes: Five Tips

Here is a great video from the Insurance Information Institute about five mistakes to avoid with your personal insurance policies. Our Oxford and Cincinnati, OH insurance offices strongly agree with these items.

National Flood Program Expired... Again

On May 31st Congress allowed the national flood program to expire once again. As of today, June 10, 2010, there has been no renewal of the flood insurance program. This is a key issue especially since a number of areas in Ohio are being resurveyed and rezoned on the national flood insurance map. Homes that were once in Zone C or X which mean they are not in a 100 year flood zone are now being classified as a Zone A or other Zone which puts them in a 100 year flood zone.

What is the significant of this? Well, if you own a home in the rezoned area that is now in a 100 year flood zone and your home has a mortgage on it, you will be required by the bank or other lending institution to purchase flood insurance. A lot of times this can be a costly policy.

What happens if you don’t buy a flood policy? The mortgage company will purchase it for you and then bill you. Unfortunately there is no way around it as long as you have a mortgage on the property.

The ironic thing about this whole situation is that right now, as of the day this blog entry was written, you can not purchase flood insurance. Flood insurance is purchased through the national flood program (FEMA) and as mentioned above the program is temporarily expired. We will be sure to keep you posted on our blog as to when the program might be back up and running. In the mean time if you have received notice from your bank that you are now in a flood zone and must purchase flood insurance feel free to get in touch with your friendly Fey Insurance Representative.

Federal Flood Program Expires

On March 26th the Senate closed for a two week recess with out approving an extension for the Federal Flood insurance program that would have carried the program through until April 30th. Because the extension was not put through the current program has expired. Any flood insurance customers that are either renewing their policy between now and April 12 (when the Senate meets again) or that need to purchase flood coverage to close on a house will not be able to. This will cause a few home closings to be pushed back until the situation is resolved.

For those that already have flood insurance in place and are not renewing anytime soon the program will still function as normal if claims arise. There are currently 5.6 million policies in force with this program.

Flood Insurance Facts

Flood insurance had its fifteen minutes of fame after the Hurricane Katrina disaster in 2005. During this time period the media was making everyone well aware that flood insurance is not part of your typical homeowner policy. Today that is still the case and with this post I would like to point out a few more facts about flood insurance.

Flood insurance is run through a government program called FEMA (Federal Emergency Management Agency). You can purchase it through insurance agency such as Fey Insurance Services but the backing is from FEMA. Typically it takes 30 days for a new flood insurance policy to go into effect. The one exception would be for a mortgage closing where flood insurance is required. So you need to plan ahead. Hearing about a big rain on the nightly news and calling your agent the next day will not work. Many people think of flood insurance when they think about what is stored in their basement. Flood insurance will only cover things such as furnaces, water heaters, washers, dryers, air conditioners, freezers, pumps and utility connections. Everything else you store down there (old cloths, furniture, carpet, TV, etc) is not covered unless those items are on the first floor of your house and the flood reaches that level.

In some cases flood insurance is required in order to get a loan. If your home or a home you are about to purchase is in a 100 year flood plain (meaning at least once every 100 years your location is under several feet of water) you will be required to purchase a flood insurance policy to close on your loan.

Feel free to get in touch with a Fey Insurance Services representative to learn more facts about flood insurance or to get a quote today.

Flood Insurance Facts

Flood Insurance

Flood Insurance

True or False?

Flood Insurance is a form of federal aid.

False. The National Flood Insurance Program is premium funded and has been operating in the black for years. It has the authority to borrow up to 1.5 billion dollars from the U.S. Treasury, however, all such funds much be repaid with interest.

Flood Insurance in not intended to restore a property to it's pre-loss condition.

False. NFIP trains its agents as recently as July 2004 that a covered loss will be restored to it's pre-loss condition, less the deductible.

The National Flood Insurance Program is a government run program.

True. The National Flood Insurance Program is a program administered by FEMA. It is a cooperative effort between most of the largest homeowners insurance companies in the country and the Federal Government. Federal regulations call for the private insurance companies, or third party administrators, to receive premium dollars, and take nearly 1/3 off the top. The private companies pass the remainder onto the NFIP. In the event of a loss, the private insurance companies are provided an additional 3% of the loss for their efforts.

At this time the underwriting risk rests solely with the Federal Government.

All NFIP Officials and personnel are federal employees.

False. The NFIP was privatized nearly twenty years ago. Computer Sciences Corporation (NYSE:CSC) handles most of the day to day aspects of the program. When a person appears at your door wearing a blue FEMA jacket, ask them for their business card. Most victims report that no such cards are ever handled out. In fact, many victims had the experience where the FEMA adjuster told them they were with the Federal Government. Technically that's true. They are a government contractor. Its similar to being stopped by a state trooper and you noticed in fine print on his shirt "Haliburton". Both are government contractors, and depending on the contract language they are often deemed agents of the U.S. Government.

Coverage questions are left up to the Federal Government.

False. Collectively the private insurance companies reap more than 600 million dollars in profits from NFIP policyholders. Federal regulations call for the insurance companies to make adjustments in accordance with their standard policies.

Private insurers must meet several criteria in order to participate with the NFIP. One is they must have been writing homeowners insurance for a minimum of five years prior to participating in the program. In those five years the insurance company has established procedures for paying its claims. Title 44 § 62.23 l states, "WYO Companies will adjust claims in accordance with general Company standards, guided by NFIP Claims manuals".