A Realtors Guide to Flood Risk Rating 2.0

The New Risk Rating 2.0 has gone into effect for all policies effective as of 10/1/2021. This change in rating flood insurance is going to fundamentally change the way we, as insurance agents, approach flood insurance. We want you to focus on the items that directly affect your clients. See below for a list of Frequently Asked Questions to help you and your clients.

Q: If our property is not in a “flood zone” it is only in an X zone and the lender is not requiring it, Can my client still get the fixed lower rates?

A: No.  The days of the “preferred” policy are gone.  Each home is being rated independently and the flood zone is just one of the determinations.  The NFIP is offering varying rates depending on the home’s elevation and distance to a high risk flood zone and distance to a waterway (and other things).  Also we can now use Elevation Certificates for homes in an X zone to assist with pricing, this was not an option before.

Q: Can we obtain an Elevation Certificate from FEMA or NFIP?

A: No.  This certificate is privately obtain by the owner of the home or the builder.  You can always ask a seller if they have one.  If they do not, then one must be completed by a survey company or an engineer.  They average $250-$450 – Additional acreage may cost more.

Q: Will a client who has a flood policy under the old rating system need to obtain an elevation certificate at renewal? 

A: No. An elevation certificate is not required but if the elevation that is determined by the NFIP’s public data source does not seem accurate one can be used to try and lower the flood insurance premium.

Q:  Can policies still be transferred from a seller at the time of purchase?

A: Yes.  This is something we can assist with, even if seller is not a Gibraltar Client we can assist with the transfer of the policy to your buyer and move it to our agency for management.  Even policies in an X zone can be transferred.

Q: Can we grandfather in our rates? Or our zone? 

A:  No,  one of the things that is no longer allowed is the grandfathering of zones or using old zones based on the construction year of the property.  All new policies will be rated on the new rating system under the current zone.

Q: My clients flood rates are VERY HIGH,  what do we do? 

A: The NFIP rates can be unpredictable right now, but we have a lot of non-NFIP options through private flood carriers that can assist. Lenders do accept private flood policies to qualify for a loan.   

Q: Will my flood rates increase? 

A: Maybe, we are seeing many preferred rates increasing under the new program but some are going down. The best thing to do is contact us at renewal and we can assist you. If you client purchases with us, we are always reviewing policies for rate changes and to see how we can assist if there is a large rate increase

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