Things to Know About Private Flood Insurance
Private flood insurance is an alternative to the National Flood Insurance Program (NFIP). It is offered by private companies and often provides broader coverage and higher limits than NFIP policies. Rick Tinker Insurance provides private flood insurance in Houston, Friendswood, TX, Pasadena, TX, League City, Galveston, Pearland and surrounding areas.
Customizable Coverage
Unlike NFIP policies, which have set coverage limits ($250,000 for buildings and $100,000 for contents), private insurers can offer higher limits and additional coverage options, such as temporary living expenses, replacement cost coverage, and loss of income for businesses.
Competitive Pricing
Private insurers use their own risk assessment models, which may result in lower premiums for properties with lower flood risk. In some cases, rates may be more competitive than NFIP policies.
Faster Claims Processing
Many private insurers offer quicker claims processing than the NFIP, which can be beneficial in post-disaster situations.
Availability and Restrictions
Private flood insurance is not available in all areas, especially in high-risk flood zones where some insurers may decline coverage. Some mortgage lenders may also have restrictions on private policies.
May Not Be Backed by the Government
Unlike NFIP policies, which are backed by the federal government, private flood insurance policies depend on the financial stability of the insurer. It’s important to choose a reputable insurance provider.
Lender Acceptance
Since 2019, federal regulations require lenders to accept private flood insurance that meets specific standards. However, some lenders may still prefer NFIP policies, so it’s important to confirm with your mortgage provider.
Policy Cancellation Flexibility
NFIP policies have strict renewal and cancellation rules, while private insurers may offer more flexible terms for cancellation and policy changes.
Potential Gaps in Coverage
Some private policies may exclude specific types of damage, such as storm surge or sewer backup. Always review the policy details carefully.
Before purchasing private flood insurance, compare options, check lender requirements, and ensure the insurer is financially stable. If you would like to discuss your specific situation or have questions, please don’t hesitate to call or email.
