today we are discussing the national flood insurance program versus private flood insurance we're going to be discussing five things and this is your guide to understanding flood insurance so if you're a homeowner if you're an investor or you're a commercial business owner make sure to tune in this video by the end of this video you're going to have a pretty good idea which one of these Insurance options is the best solution for [Music] you hello my name's Chris Green president owner of the flood insurance CU room and more than 12 years ago I bought a house just like this in this area and was told that flood insurance premiums were going to be $3,000 when they should have been $300 my family and I almost lost out on this dream home and for the last 12 years I've been helping people overcome these same obstacles So today we're talking about guide to flood insurance we're talking about the national flood insurance program we're talking about private flood insurance we're discussing five things in this guide we're talking about coverages we're talking about pricing we're talking about availability we're talking about weight periods and we're talking about claims which is very important so throughout this video if you want to jump to a certain section of video this video is going to be broken up in the chapters for you where you can jump maybe to the section that you want to learn more about also make sure to stay tuned all the way at the end of this video for more resources to help you understand the differences between these two what might be the best fit for you as well as some downloadable resources as well so let's talk about the first thing today coverages let's talk about the national flood insurance program what coverages do they offer on a residential house just like this one right here when it comes to the National flood insurance program if you were in what's called a participating Community this is about 99% of the communities across the country they offer building coverage up to $250,000 on a residential property they offer contents coverage up to $100,000 now it's important to understand that as this video is being shot in 2023 the national flood insurance program does not offer replacement costs on contents it's also important to understand that generally they require your property to be either insured up to that Max limit or 80% of the replacement cost whichever one of these is of lesser value and if you don't insure for this with the national flood insurance program these policies default the actual cash value this could be a big issue for you come claim time so you want to make sure to understand it when we're talking about coverages here now let's talk a little bit about pricing with the national flood insurance program now pricing with the national flood insurance program is going to depend on each structure here behind me there's a few different things that help determine the price with the national flood insurance program policy it's replacement cost of the building it's distance the water like you can see right here behind me elevation above that water source it's flood frequency the type of flooding if flooding increases in an area then you may see rates with the national flood insurance program change from time to time so this is how they determine pricing so what about flood zones now it's important to understand with the national flood insurance program now in 2023 flood zones no longer have an impact on flood insurance rates they're strictly used from a regulatory stpoint now what about availability is the national flood insurance program available everywhere no it's not there are certain areas in certain situations where it's not available let's talk about what those are called so when we're particularly talking about here what's called nonparticipating communities these are communities that do not participate in the National flood insurance program these are going to be communities that either had a violation or they just can't take on financial burden of doing all the mitigation requirements the national flood insurance program requires this means generally speaking The Disaster Assistance and disaster grants are not going to be available in this area if a community chooses not to participate now generally this is probably less than 1% of Comm unities across the country and it's usually very rural areas other areas that may also fall under this may be what's called CB areas these are coastal beer relief protection areas these are generally properties that either have been approved or built after roughly 1990 sometimes it could be a little bit earlier sometimes it could be a couple years later generally in these situations the national flood insurance program is not available so those are coverages that's pricing and that's availability with the national flood insurance program now let's talk about weight weight periods now with weight periods with the national flood insurance program you generally have three different types of weight periods you have no weight period for a lone Clos and like you could probably see on this new house behind me where this family is getting ready to move in right here in the water they're wanting to make sure their property is properly protected by flood insurance but if they were doing a loan closing not a real estate transaction but a loan closing they would have no weight period so they can make sure their property is protected right away with the national flood insurance program now let's say this area was recently mapped into a high-risk flood zone I know cuz I personally had that happen on my prop property that means I would only have a one day weight period with the national flood insurance program what if I was lucky enough to pay cash for a property like this and generally I'm going to have a 30-day weight period here or maybe I'm an investor buying this that does not include a loone closing then I'm going to have a 30-day weight period so those are different weight periods now let's talk about claims now when it comes to claims with the national flood insurance program these work very uniquely you know with the national flood insurance program if you don't like how your claims process is going you might be able to do an appe pill up to 60 days you know you may be able to take a look hey I had this much coverage but you're giving me a check for this amount or you know here's my documentation of the damage I had because we always recommend taking videos just like this one right here taking photos to document those damage to show and adjust to where they come out here's what was damage that I had to throw away that I had to get rid of it so that's the national flood insurance program now let's talk about private flood insurance and then we'll kind of move on maybe to what we feel sometimes is the best fit for maybe you as a propior maybe you as an investor now with the private flood insurance let's first of all talk about coverage we talked about the national flood insurance program having $250,000 on a residential building on $100,000 in contest in many situations private flood insurance is actually going to offer more than this they can actually offer many situations true replacement costs now it's important to understand that when you're looking at these coverages though one of the big differences between private companies and the national flood insurance program is that in many situations private flood insurance can offer replacement cost on your contents that means that that TV you bought 10 years ago you may actually get the money to replace it today not would it cost to buy it 10 years ago cuz with this economy I mean you can imagine how much you would actually get for that TV next to nothing so that's important to understand there it's also important to understand that while the national flood insurance program offers building coverage and alha contents coverage private flood insurance can also offer something called loss of view additional living expenses what exactly is this well imagine that this house right here was to flood and you needed a temporary place to live if you had a national flood insurance program policy generally you wouldn't have this coverage but with a private flood insurance policy you could I know cuz we had a customer that had about 6 months of a hotel provided for on their private flood insurance policy while their neighbors did not with the national flood insurance program it just took a major burden off of her allowing her to get back up on her feet quicker financially because she had the coverage there now it's important to understand that we're talking about the national flood insurance program we're talking about private flood insurance generally each one of these coverages has its own deductible so it's important to understand that when you're picking deductibles with your coverages you may not want to pick a $10,000 deductible cuz it could mean that you have a $10,000 deductible on the building you have a $10,000 deductible on contents you have a $10,000 deductible on additional living expenses that could be a $30,000 deductible that could be a big hit to your wallet so you want to be careful with picking those duct bbls and keeping that in mind now let's talk about pricing with the private flood insurance Market while flood zones are no longer determined to use rates with the national flood insurance program many private companies still use them now is it their leading Factor no they look at a lot of different risk factors just like the national flood insurance program does like you can see right here replacement cost of a property is a big factor a distance to water a type of flooding flooding frequency something called a flood risk score which we have on our website which will tell you the flood risk score of your property from Z to 100 a lot of private flood insurance companies also use this to determine what their pricing model was going to be here and of course they based on the amount of coverages that you're selecting history of Claims can have a big impact in fact in many situations it can knock a lot of private companies out completely cuz some private companies will never insure a property that's had a claim so it's important to understand that when looking at deciding to file claim or not now let's talk about some of the weight periods you unlike the national flood insurance program there's really only two types of weight periods with private you've got one which is the No loan closing just like the national flood insurance program and the other one is your standard weight period now depending on the private company this could be a couple days it could be up to 15 days but generally it's not going to be up to 30 days like it is with the national flood insurance program now what about claims now it's important to understand that when we're talking about claims with the private flood insurance Market is completely different now these are generally what's called nonadmitted policies this means you may not have the opportunity to appeal a claim like you would with a national flood insurance program however you also don't have the red tape I know we've handled more than 2,000 claims in 2022 with the national flood insurance program are private flood insurance and we find that private flood insurance claims generally can get settled quicker because you have less red tape but you're dealing with here because you're dealing directly with a private company and usually their reinsurance company this also means that you may be able to get more coverage here you may be able to get replacement cost on contents you may not be able to appeal a claims process though and you want to think about that as your going and deciding between the national flood insurance program and private flood insurance so these are five things that we wanted to talk about so in this video so far we've talked about coverages we've talked about pricing we talked about availability we've talked about weight periods and we've talked about Flames now let's talk about what's the best solution for you you know it's a question we hear from people every day hey should I go with a national flood insurance program or should I go with private flood insurance and a lot of it comes down to first of all are you wanted something that's backed by the government or something that's backed by private companies because in many situations the pricing with private flood insurance can seem much less in fact in many situations we see where it's about 40% less than the national flood insurance program this could be a great benefit for you one thing you want to look at before taking out that private flood insurance policy is what are the exclusions what does the private company defined as a flood because remember with the national flood insurance program they Define a flood as either two acres or two properties that have been flooded that were normally dry areas now one of those has to be your property but some private companies may only have the definition of one property you want to make sure that you're understanding this before taking out the flood insurance what we find out is that so many times people take out this policy and the policy would never pay out for what they're looking for because it was really more of a drainage issue it was more of an issue with their their neighbor's house than it was an actual flood so make sure you pay attention to definitions and exclusions when picking between the national flood insurance program and private flood insurance Also may depend on what part of the country in for example if you're in Florida if you're in Louisiana the national flood insurance program may actually be a more stable situation for you there because the flood Market is so volatile because of those hurricane prent areas just like areas like Myrtle Beach you want to take a look and when you're asking these questions trying to decide between the national flood insurance program or private ask about hey what are the have the rates with this particular company look like over the last three years also ask your age hey what are my premiums going to look with the national flood insurance program over the next 5 years that's generally something they can take a look at looking with full risk premium looking at flood risk modeling and if I can't go over to our website and we'll kind of show you of what you can potentially expect with the Way flood risk is changing with weather patterns full risk premium with your National flood insurance program policy and what you can expect in year 2 year three and year four because as you get ready to make this big purchase as a property owner you know you want to prepare for today you got to prepare for year two or year three year four that's really what we're trying to do here and help you understand that that is the national flood insurance program and private flood insurance in 2023 now if you want to learn more about the national flood insurance program between the differences between residential and Commercial click here in this video if you want to learn you know a better understanding of non-admitted versus admitted with private flood insurance you can click up here as well and you can get an additional video there that goes into a little more detail you can also click in the description where we've got some downloadable links for you that help you understand the difference here one thing we've got also down there is five things to know before purchasing flood insurance my name is Chris Green president owner of the flood insurance Carew and I want to say thank you for tuning in today's video on National flood insurance program First's private flood insurance thank you [Music] h