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Flood Insurance, Simplified!

It Doesn't Have to Be Tricky

Posted in Personal Lines

Author: Cheryl Gleason

For someone who deals with all different types of personal lines coverage on a daily basis, I'll be the first to admit that flood coverage can be tricky. Navigating through the ever-evolving laws and regulations associated with flood insurance has left many independent agents unsure of the options they can present to their insureds. That’s why I put together this blog, to help make your navigating a bit easier!

One of the most common questions I hear from my agents about Flood Insurance revolves around the topic of Non-Participating versus Participating Communities.  Depending on the area where your Insured lives, he or she could face different challenges in obtaining coverage based on whether their community participates or does not participate with FEMA (Federal Emergency Management Agency). 
FEMA manages the National Flood Insurance Program (NFIP), which enables property owners in Participating Communities to purchase insurance protection from the government against flood losses. 

So what does it mean for a community to be Participating or Non-Participating? 

Participating Communities are areas that FEMA has determined to be at risk for flooding and they have mapped the areas accordingly.  Participating communities are usually located in high risk zones, but don't necessarily take in to account the elevation of the area. 
Non-participating Communities are zones that are either: 
  • Not mapped by the Federal Emergency Management Agency 
  • Remapped by FEMA, do not qualify for the FEMA based program due to location 
  • Do not comply with the FEMA based guidelines 
  • These communities do not have the ability to purchase federally insured flood coverage. 

Since Non-Participating Communities do not have the ability to purchase coverage through NFIP, one of the biggest questions I get from agents is, “Can you place a flood insurance policy in a non-participating community?” The answer, yes!

In fact, there are programs outside of FEMA that provide flood coverage for both, Non-Participating and Participating areas. This then begs the question:

If someone lives in a Participating Community, why would they purchase coverage outside of the federal program?
These are typically the three main reasons why: 
  • They don’t want to wait for coverage (FEMA requires a 30-day waiting period for coverage to take effect) 
  • A higher insured value is needed 
  • Total premium can be cheaper due to less fees

I've always been a fan of keeping things simple. With the ability to write in both Participating and Non-Participating Communities, it turns out that flood insurance doesn't have to be all that tricky after all. Still have questions about flood insurance? Our underwriters are always here to help. 

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