A Case Study in how you can save on your Flood Insurance Costs

As customers with mandatory flood policies start to receive their renewals, they are often faced with what seems like an insurmountable financial obstacle. We wanted to highlight a recent example that shows not only the significant increases that are likely coming for many homeowners, but also show that working with an experience and knowledgeable agent can be the difference between paying unnecessarily high premiums, and saving money by making your home compliant.

A current customer, whom we will call Jane, purchased a home in January 2013. The home was located in an AE Zone or Special Flood Hazard Area which meant she was required to purchase a flood policy.  The company that wrote the policy failed to disclose at the time she purchased it that the $950 rate that she was quoted was a subsidized rate and that the following year this rate would no longer be valid. Had the company informed her of what the rate would eventually be she may have opted to purchase a different property. In December Jane received her renewal notice which showed that her rate would be increasing to $5,221. Almost a 6 fold increase! Needless to say that Jane is a single Mom on a tight budget and she in no way had been prepared for or made necessary adjustments in her budget to cover this massive increase. 

Jane contacted COMPARITY and we had a team of flood compliance contractors prepare estimates for the work that would help make Jane’s home compliant and reduce these flood insurance costs. Jane worked with our agents to evaluated her various options and we were able to determine that by installing some engineered flood vents in her crawl space, and elevating some equipment in her home that we could reduce her costs from $5,221 per year to $833. While this wasn’t the lowest possible rate, the additional work that would have been required to make the home fully compliant was not cost justifiable.  The total costs for the changes that were made was $3500. By making these adjustments Jane saved $888 this year and will save more than $4,300 next year. 

There are three key takeaways from this story.

1. If you live in a Special Flood Hard Area (AE, A, VE or V Zone) and are required to carry flood insurance you should have a licensed and knowledgeable insurance agent review your policy to determine f savings are possible. 

2. Failing to make your home compliant with FEMA regulations as part of the National Flood Insurance Program could result in hefty increases in your flood premiums. 

3. The sooner that you act on making your home compliant if modifications are possible, the sooner you can see your savings. 

Feel free to contact us at 757-416-5191 if you have questions about your flood insurance rates. we will be happy to fully educate you on the changes to the program as well as review your current policy at no charge.


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