Recently we were asked by a client to shop their Massachusetts Flood Insurance Policy which is with NFIP.
NFIP stands for The National Flood Insurance Plan offered by FEMA which stands for Federal Emergency Management Association which is under the control of United States Department of Homeland Security.
According to NFIP’s website:
“The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners, renters and businesses and by encouraging communities to adopt and enforce floodplain management regulations. These efforts help mitigate the effects of flooding on new and improved structures. Overall, the program reduces the socio-economic impact of disasters by promoting the purchase and retention of general risk insurance, but also of flood insurance, specifically.”
Unfortunately the part about “providing affordable insurance to property owners,” doesn’t always seem too accurate.
Our client owns a small cottage on Cape Cod, unfortunately located in a VE flood zone.
VE flood zone is described: Areas subject to inundation by the 1-percent-annual-chance flood event with additional hazards due to storm-induced velocity wave action. Base Flood Elevations (BFEs) derived from detailed hydraulic analyses are shown. Mandatory flood insurance purchase requirements and floodplain management standards apply.
NFIP’s “affordable” annual, renewal premium offer was:
$4,602.00 for $88,000 of building coverage, subject to $5,000 deductible.
$5,205.00 for increased building coverage of $96,800, subject to $5,000 deductible.
We then marketed this property to the emerging, evolving private flood insurance market.
We were able to secure a quote of: $3,056.64 for $90,000 of building coverage, subject to $5,000 deductible.
Impressed, we were less so when we received an additional quote, from another private flood insurance market, for: $1,180.00 for $90,000 building, subject to $1,000 deductible.
With some marketing effort, our client was able to reduce their flood insurance from $4,602.00 to $1,180.00.
So, the morale of the story is, just because the NFIP brags about offering “affordable” Massachusetts flood insurance coverage, it’s not always the case.
Seek the advice and shopping power of your trusted independent insurance agent.