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panteramatt

Homeowners and flood insurance

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My number one question: "how can it be cheaper than FEMA?" Because FEMA charges the same risk premium to every house regardless of state or location. The private companies are insuring 1% SHFA risk areas that are not repeat offenders and because of this they can do it for half the price.

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How much coverage do I need? The Freddie and Fannie bylaws state you carry the LESSER of mortgage amount or replacement cost. If your bank tells you you need more they are lying to you.

 

The following premiums are from Lloyds:

 

$250k. $1827

$200k. $1485

$150k. $1143

$100k. $843

 

Anybody paying more than that for their flood please you are over insured

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This is great info.  I'm currently paying about $1600 for $155k through FEMA.  I call every year and have them lower it to cover just my remaining mortgage principal.  The only catch that I read, after finding out about the private market from you guys, is that once you leave the FEMA backed coverage, you're no longer protected by the guarantee for pre-FIRM rates, should the private market deny you coverage or stop offering coverage in the future.  Thoughts on that? 

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That is a myth not a fact. If you let insurance coverage LAPSE you cannot go back.

 

Besides it will all be moot. The Flood Parity Act that is about to be signed codifies total bilateral switching.

 

Private flood will become primary insurance and FEMA will be last resort insurance. That is the goal.

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That is a myth not a fact. If you let insurance coverage LAPSE you cannot go back.

 

Besides it will all be moot. The Flood Parity Act that is about to be signed codifies total bilateral switching.

 

Private flood will become primary insurance and FEMA will be last resort insurance. That is the goal.

 

Wow - that sounds great.  I'm definitely going to start following this bill, then.  So, let me get this straight (and I know, YANAL, so I won't bet the back on it without confirming officially, yada yada), but having COVERAGE, regardless of private or FEMA, will allow you to remain eligible for FEMA coverage in the future, for a pre-FIRM property?

 

Thanks again for all of the info.  Admittedly, I haven't had the chance to do further research and have just been paying the FEMA rates since we moved in 5 years ago.  I have planned to get an elevation survey since we're pretty high up, but every year, our discretionary spending has disappeared before I've had the chance...

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Since it's so new nobody has "tested" going back to FEMA. But your idea of pre FIRM grandfathering is going away anyway. Rates increase 20% a year until no subsidy is keft anyway.

 

I don't understand why guys "wait". It's costing you $2 grand more a year. I'm over $6 grand ahead since I started. Don't you understand your thinking of reasons to stay in the most expensive insurance industry ever? The math doesn't add up. Down the street the guys basement filled up during Irene. His payout was $9k. He paid $3500 a year fir a $9k loss. That's like 30% cost vs payout ratio. That's not insurance that's robbery. Don't think of reasons to stay with the thief. Think of ways to run away from the thief.

 

What do you pay like $900 a year to protect your home from burning down? How can you be paying over $3k for a flood? Is where you live a flood going to destroy your ENTIRE house? That's the point. The FEMA rate is based on total destruction of your hiuse. So you determine whether you think your basement is at risk or water up to your roof. No way am I gonna pay $3500 a year for a basement flood loss where the max they will cut me a check for is ten grand.

 

It's not that I think LLOYDS is a better insurer than the US government it's that the FEMA rate is insane to me. It's robbery.

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Since it's so new nobody has "tested" going back to FEMA. But your idea of pre FIRM grandfathering is going away anyway. Rates increase 20% a year until no subsidy is keft anyway.

 

I don't understand why guys "wait". It's costing you $2 grand more a year. I'm over $6 grand ahead since I started. Don't you understand your thinking of reasons to stay in the most expensive insurance industry ever? The math doesn't add up. Down the street the guys basement filled up during Irene. His payout was $9k. He paid $3500 a year fir a $9k loss. That's like 30% cost vs payout ratio. That's not insurance that's robbery. Don't think of reasons to stay with the thief. Think of ways to run away from the thief.

 

What do you pay like $900 a year to protect your home from burning down? How can you be paying over $3k for a flood? Is where you live a flood going to destroy your ENTIRE house? That's the point. The FEMA rate is based on total destruction of your hiuse. So you determine whether you think your basement is at risk or water up to your roof. No way am I gonna pay $3500 a year for a basement flood loss where the max they will cut me a check for is ten grand.

 

It's not that I think LLOYDS is a better insurer than the US government it's that the FEMA rate is insane to me. It's robbery.

 

I definitely agree - but my savings is not that extreme.  In FEMA, I'm paying $1600/yr.  Private quote was $1100.  Obviously I should move immediately to private.  However, the reason I haven't gotten the elevation survey is that I fear that it won't get us out of AE.  If we're still AE, I'm out $400 (or more) since per FEMA rates, there's no reduction unless you're above the BFE.  Ours is 33'.  My guess is that we're going to be close, either just over or just under.  I only have coverage to my mortgage principal because I honestly don't think a worst-case flood would do more than create some pooling in our basement. 

 

My question is whether our rate for private insurance will decrease if we aren't above the BFE, but if we are close.  Let's say we're at 31' and BFE is 33'.  Will private insurance grant us a rate reduction with an elevation survey showing this?  FEMA won't reduce us at all unless we're +33'...32.5' doesn't cut us a dime.  When I put in for the instant quote on the privateflood website, if I try to enter an elevation cert to get an idea, it asks for codes.  I don't know what the codes represent and how to estimate, if I wanted to simulate the equivalent of 31' in a 33' BFE.  That might have been too wordy, but I think it made sense.  LOL.

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