What exactly does FEMA Flood Insurance cover?

[FiveDriver]

We have a Flood Insurance policy on our Home here in South Carolina. When we bought the house 10 years ago we were in FEMA Flood Zone AE, based on 1985 maps. So we started a policy thru Progressive.

According to the newly released map, we are now in Zone X. We are nowhere near any storm surge area. We've lived thru 2 Hurricanes and the Thousand Year Flood in 2015. No water ever approached our house.

The Premiums on the Flood policy keep increasing. In 2021, it was $572 per year, and that provided Peace of Mind. This year's Renewal Notice just arrived -- it's now up to $797.

I'm wondering what we're actually covering with this Premium. Reading Insurance Jargon is not my strong suit. FEMA sends a booklet each renewal, with pretty pictures and words in English which mean nothing to a civilian like me. And the nice young lady at our local Progressive Agent's office is not a scholar on these coverages either.

Doesn't my regular Home Insurance from Allstate cover any calamity from Hurry-canes ?

 

[djsander]

We have a Flood Insurance policy on our Home here in South Carolina. When we bought the house 10 years ago we were in FEMA Flood Zone AE, based on 1985 maps. So we started a policy thru Progressive.

According to the newly released map, we are now in Zone X. We are nowhere near any storm surge area. We've lived thru 2 Hurricanes and the Thousand Year Flood in 2015. No water ever approached our house.

The Premiums on the Flood policy keep increasing. In 2021, it was $572 per year, and that provided Peace of Mind. This year's Renewal Notice just arrived -- it's now up to $797.

I'm wondering what we're actually covering with this Premium. Reading Insurance Jargon is not my strong suit. FEMA sends a booklet each renewal, with pretty pictures and words in English which mean nothing to a civilian like me. And the nice young lady at our local Progressive Agent's office is not a scholar on these coverages either.

Doesn't my regular Home Insurance from Allstate cover any calamity from Hurry-canes ?

We used to live in North Louisiana. We had to have named storm damage on our policy through USAA. Yes, 300 miles inland we still had tropical storm winds and once still had a cat 1. FEMA insurance covers water damage from floods. What causes the flood is still a gray area to me. We had a similar situation where we were in the lowest rated flood insurance then they re-evaluated and we ended up in what I believe was X. They can raise the rates 15% per year is what we were told. There was also something about getting an elevation certificate to stop the increases. Don’t know how that worked. I downloaded the flood maps and looked at the ratings and ours was based on a catastrophic levee break. You probably need to have more discussions on what the hurricane insurance actually covers. We carried both as a precaution as even if flooding from a hurricane is covered in hurricane insurance which we didn’t have a clear answer on. Flooding from other causes requires flood insurance.

 

[Kings over Queens]

The renewal policy should re-rate to flood zone x which is the most preferred, and least expensive premium band. If it doesn't remind your broker or the carrier about the change in FIRM.

Assuming you have an NFIP flood policy, as far as coverage, it's pretty crappy. Essentially no coverage for basements and only coverage for things that are touched by water.

Imagine this, you've got 2 feet of water in the house, they are going to cut a line at 30 inches from the floor, cut out that sheetrock, remove that insulation, and make repairs. If your base cabinets are damaged, but not the wall cabinets, only the base get covered. claims are settled at actual cash value, NOT replacement cost.

There are private flood insurance companies but you have to look around.

 

[FindingForward]

same boat - x rated, never a flood in 35+ years, despite heavy rains and storms. Yet flood insurance keeps rising from 400 to 500 to 700 and beyond. So tempted to cancel next year, but like OP don't really have clarity re: where regular home insurance ends and flood begins - seems like home insurer can too easily claim "flood damage" and wash their hands of financial responsibility.

 

[Kings over Queens]

It's not as easy as you'd think. "flood" is a very specific term, and is very different than "water damage."

Pipe bursts and floods your house is a water damage claim despite the normal reaction for people so claim "my house was flooded."

 

[FiveDriver]

Thanks for the responses. The Zone X designation was recognized last year, and only slowed the rate increase marginally for that year.

We are located about 10 miles from the Oceanfront as the crow flies. It would take a hell of a Tsunami to reach our house. And if it did, the entire East Coast would be wiped out too. FEMA don't have enough money to fix all that kind of calamity.

There's a 3 acre lake across the street from our home, which acts like a runoff for any heavy rain. The mean water level in the lake sits about 5 feet below our living area, the home is on a slab. It would take 15 acre-feet of rain before I start filling sand bags !! We never even approached high water during the Hurricanes or the 2015 Thousand Year Flood event.

The existing FEMA policy expires on May 1st. Currently thinking about letting it run out. Our Homeowner's Insurance provides some level of coverage.