What Property Owners Should Know about Flood Insurance

Flash floods and slow floods are both contributing causes of weather-related fatalities each year. In addition to this, flooding is the most common weather-related cause of property damage. During the famous Hurricane Sandy storm, many property owners were unprepared and saw their homes wash away, suffered injuries or lost their businesses. Experts say that Hurricane Sandy caused more than $6.5 billion in flood insurance payouts, which come from the National Flood Insurance Program. This number was less than half of the $16 billion or more that Hurricane Katrina brought in insurance payouts. There are several ways people can prepare themselves for these disasters.

Know Flood Risk Experts say that people should learn the flooding risk of the area where they live or where their businesses are located. They should also take the necessary steps to reduce those risks. One way to start is to find out the local flood zone risk by using maps. To learn more about these maps, discuss them with an agent or visit the Federal Emergency Management Agency’s site. They provide maps that allow site visitors to look up their properties by address. People who are concerned about privacy issues with this site can also contact their local or state government offices for information. Even if an area is not listed as a high-risk flood zone, keep in mind that floods are still possible.

Current Flood Maps FEMA is responsible for redrawing flood maps to show new data and other recommendations. Many communities receive new maps frequently as part of a continual initiative by FEMA to keep accurate and current data. An agent can advise whether or not local flood maps are current or need to be updated. For areas where updates are ongoing or have been recently completed, it is important for people in that area to adjust their insurance coverage as needed.

Base Flood Elevation After discovering a property is in a flood zone, it is important to find out what the base flood elevation is. This is the location at which a structure has a one percent chance of being flooded each year. The BFE number for a property is listed on flood maps, but it is also possible to contact an agent to look up the number. After a BFE has been determined, it is important to find the structure’s lowest floor below or above the BFE level. Buildings that are below the BFE for the area may need to be elevated to lower their chances of being flooded. Buildings should be at least three feet above the BFE level to ensure they are protected against waves or higher-than-usual flooding levels.

Flood Coverage After finding out what the risks of flooding are, it is important to buy or review insurance. People who have flood coverage should review it to ensure it is sufficient, and people who do not have insurance should obtain it immediately. This coverage is offered by the NFIP, but it can be purchased through private agents. People who have federally-backed loans for their properties should also know that their lenders often require them to buy flood insurance if they are close to or in a high-risk flood area. For those who live in high-risk flood zones, it is helpful to become familiar with changes approved for the NFIP by the government. These can differ from one year to the next, so it is best to discuss recent changes with an agent. Flood insurance rates are required by law to show the true risk of a particular area. The most recent changes mean that a significant amount of property owners will see increases in their flood coverage premiums. For answers to questions, contact ACBI.

Preparing for Flood Season

It’s flood season in much of the country – but Americans remain woefully unprepared. One California study – surveying residents of a state that is historically vulnerable to flooding and landslides – found that less than 3 percent of residents and business owners own flood insurance.

In some cases, consumers are under the misconception that standard homeowner and commercial property insurance policies cover risk from floods and mudslides. They do not.

Yet the vast majority of Americans also cannot afford to pay the risk out of pocket. The average flood damage claim, nationwide, between 2008 and 2012, is approximately $38,000 per household per incident, according to information from the National Flood Insurance Program.

What you can do:

Review your homeowners, renters or business insurance policies

Residents need to determine exactly what their policies cover and determine if flood insurance is a suitable option for them.

See if your home or structure is in a flood plain. Geologists have recently made some changes to flood zone maps, so if you haven’t checked recently, your property insurance agent can show you the official federal maps. But remember that even homes outside known flood hazard areas can get flooded.

Prepare an emergency evacuation kit. Many times areas have a lot of warning prior to a flood – but this isn’t always the case. Flash floods can occur surprisingly quickly, and your neighborhood could possibly be at risk from an event miles up river from you.

The federal government has published a recommended emergency supply list.

Inventory your property and document its value. This will go a long way to making sure any claims experience goes smoothly. Visit www.knowyourstuff.org for more information and a popular program to help make it easy to establish and maintain a property inventory.

Questions for your agent:

  • Do I live in a designated flood zone?
  • Is flood insurance mandatory?
  • Does my lender require flood insurance?
  • Am I eligible for a preferred rating on my flood policy?
  • What damage to my home will be covered in the event of a flood?
  • What damage to my home’s contents will be covered? Will I need to buy additional insurance to protect my home’s contents?
  • Does my condo association maintain flood coverage? Do I need more?
  • Is my neighborhood or community in the NFIP Community Ratings System?
  • Am I covered for the current market value of my home? The book value of my home? Or for what it costs to rebuild it? How is that calculated?
  • Is my home eligible for a discount?
  • What is the cost?
  • Who should I call if I want to file a claim?
  • How do you handle renewals?

Some additional considerations:

You may need to get additional insurance to cover water damage that occurs due to high winds. This is especially true in coastal areas subject to hurricanes and tropical storms.

If you have received a federal disaster assistance loan, you may be required to maintain flood insurance coverage until the loan is paid off. Most lenders also require flood insurance on homes built within a flood hazard area for the duration of the loan.

Remember – flood insurance generally comes with a 30-day exclusion period. That is, policies don’t cover flood events within the first 30 days of purchasing a policy. You can’t wait for a bad weather forecast to get coverage in place. You must purchase your coverage before the crisis.  Call ACBI with any questions or if you need to purchase Flood Insurance.

Congress Delays Flood Insurance Premium Hikes

Homeowners in flood plains across the country breathed a sigh of relief in March, when Congress passed and the President signed legislation that staved off a wave of flood insurance premium increases called for by the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012.

The Biggert Waters legislation, among other things, called for flood insurance premiums to be set to a level that accurately reflected the expected damages from flooding for every individual property in the National Flood Insurance Program.

It sounds like common sense. Reform was desperately needed. The National Flood Insurance Program was deep in red ink. But the law ran into political trouble almost as soon as it was passed. The 2012 law doubled scheduled rate increases for covered properties from 10 percent to 20 percent. For certain properties, rates could be increased as much as 25 percent every year. And some previously uninsured properties had premiums that would outstrip the value of the entire property itself within a few years if something wasn’t done.

As it stood, the NFIP was nearly $20 billion in debt. If it were a private company, it would be insolvent, as expected liabilities vastly exceeded assets. The program had recently sought and received a large taxpayer bailout – which critics said was a massive subsidy from renters and working class Americans to wealthier coastal homeowners. There was an element of class conflict: USAToday discovered that taxpayers weren’t just subsidizing first homes, but that at least 370,000 second homes were receiving heavy subsidies for flood insurance premiums. Taxpayers in less flood-prone areas were left scratching their heads why they were paying into a program that benefited them so little, while some properties were generating repeated claims and never had a premium increase. At least one property USAToday identified had flooded 34 times in 32 years, generating $600,000 in claims for a house that barely worth 10 percent of that figure – and had never had insurance revoked, never been condemned, and never had a premium increase.

The Counterattack

Coastal dwellers and other flood-plain property owners complained to their Congressional representatives. They warned of an impending collapse in property values in coastal areas as new purchasers were forced to price in the effects of higher flood insurance premiums. They also warned that many of these individuals simply could not afford it. They threatened to cancel their policies in violation of the terms of their mortgages, forcing banks to either look the other way – and accept the risk themselves – or foreclose. Homeowners who couldn’t sell their properties and couldn’t keep up with the mortgage and flood insurance premiums after the hikes threatened they would be forced to simply walk away from their properties – sparking a replay of the ‘jingle mail’ practice of strategic default that became dangerously common in 2008-2010, during the mortgage crisis. The potential fallout among the most affected areas threatened to overwhelm the actuarial dispute over funding flood risks, with tens of thousands of construction jobs and other indirect economic costs on the line, not directly reflected in flood insurance projections.

Naturally, this prospect spooked lenders. The combined lobbies of the mortgage industry and the real estate industry, combined with strong congressional representation in heavily-populated coastal areas caused the federal government to flinch. The President finally signed a new law, the Homeowners Flood Insurance Affordability Act of 2014, repealing or delaying many of the premium rate hikes called for in the Biggert-Waters Act – and even refunded money to property owners who had already paid the higher premiums into the fund.

The new law doesn’t do anything to shore up the National Flood Insurance Program, either. Actually, the Congressional Budget Office estimates that the new law will cause a net $2.1 billion decrease in income to the National Flood Insurance Program over the next ten years.

So current homeowners in flood-prone areas won a short-term victory. But taxpayers are rapidly growing weary of providing subsidies to wealthy beachfront property owners. Yes, the situation is far more complicated than that, but such are the optics on the surface, and optics count with voters. The new law kicks the can down the road and delays an inevitable reckoning.  If you have any questions about Flood Insurance, please call ACBI at 203-259-7580 or visit our website

Stay Safe by Keeping Tabs on Hurricanes through Mobile Apps

Technologies may change by leaps and bounds, but the forces of nature remain raw, powerful and – oftentimes – destructive.

While technology may never rival the power of nature, it has proven to be an invaluable tool in helping people protect themselves against the potential damage hurricanes bring. Information is the tool meteorologists and hurricane experts rely on the most – thanks to technological advances such as satellites and radars.

Today, these technologies are simply a touch away from anyone who has a smartphone or tablet – be it an iPhone, iPad, Android device or the newest Windows 8 tablet. Beyond combining several gadgets in one sleek package, these devices can now empower any user with valuable hurricane information – through a growing range of hurricane apps.

As the country faces another hurricane season, it might be wise to add “download hurricane apps” to your hurricane preparedness list.

The Choices before the Storm

What app, you ask? The choices seem to be growing steadily with emerging software developers and increasingly accessible technologies. As with most apps, the basic features of most hurricane apps are similar:

  •  Visual

A picture of a hurricane is definitely worth a thousand words. This is why almost all hurricane apps provide high-resolution images of hurricanes as well as maps tracking their projected paths through satellite and radar.

  •  Informative

Apart from providing warning information such as a hurricane’s estimated time of landfall, wind speeds and duration, many apps include checklists and planning maps, among other preparation tools. One of the top-rated apps by users and the media, Hurricanes by American Red Cross, for example, includes comprehensive details such as step-by-step to-do instructions when cell towers are down and the power is out. This app also goes a step further by including a built-in test that will enable users to find out how ready they are for the hurricane.

  •  Geographical

Do you want information that covers the whole country or prefer tracking hurricanes in a specific area? Hurricane Hound Free by STKI Concepts, for instance, covers the Atlantic and Eastern Pacific basins. It lets users choose the ocean basin they are interested in, one of three graphical themes, and their preferred wind speed units.

  •  Interactive

Many apps easily connect to Facebook, Twitter, email and other social media to let users get in touch with their family and friends, and update them of their current circumstances. WDSU Hurricane Central by HTVMA Solutions, Inc. even lets users share their hurricane photos and videos.

Other considerations that may limit your choices are the apps’ hardware and software requirements. Aside from the performance, speed and graphics quality of your device, an app, such as Hurricane Software by HurricaneSoftware.com, may also require GPS and internet connection to function optimally.

The only way to know which apps suit your needs the most is trying them out yourself. After all, it only takes several minutes to download and install each app – except for some which may also cost you about 99 cents to a few dollars.

These paid apps are often mainly ad-free versions of the free apps, or include some value-added functions. For example, SeaStorm by Poignant Projects, which can be downloaded for $1.99, packs more punch with an optional forecast model viewer add-on. It has an interactive map complete with panning, zooming and individual model point information, as well as selectable models, start time and run length.

Before you decide on keeping all apps that you have tried, ask yourself: What good will 10 great apps do you when they drain your device’s battery and memory faster than a hurricane’s maximum sustained wind?

Rate your apps based on your own criteria and choose the top two or three apps to keep – and update regularly.

Covering All Bases

Remember that preparing for a hurricane means also preparing for possible flooding, storm surge, high winds and tornadoes.

Downloading an app is one step out of many. You may also install other disaster preparedness apps to complement your hurricane app, but make sure that you cover all bases by planning several strategies for different scenarios.

For long-term protection, ensure that your family, as well as homes, businesses and other properties, are covered by adequate insurance. Most homeowners’ insurance policies, for instance, do not cover flooding. Review your existing policies – and update or upgrade if necessary.

After the Hurricane

How did your apps help you before, during and after the hurricane? Find time to leave ratings, comments and suggestions on the apps’ download page. Apart from informing potential app users of your actual experience, your feedback will also help software developers improve the apps – and possibly save lives and properties.

What The Weather Experts Are Doing To Prepare For A Worsening Hurricane Season

 Are you properly protected?  Call ACBI at 203-259-7580 or visit our website

Weather experts predicted a very early and active hurricane season for 2013. The hurricane season lasts for six months and starts on the first day of June. Experts said the chance of having up to 20 storms during those months was about 70 percent. Of these storms, they predicted that up to 11 could become hurricanes, which means the wind gusts would be higher than 74 mph. They also predicted that as many as six of these storms could be major hurricanes. To be considered a major hurricane, a storm must have wind gusts higher than 111 mph. The seasonal average at the time of their prediction was three major hurricanes, six hurricanes and 12 storms.

After several devastating hurricanes hitting the United States during the past decade, many people become increasingly nervous when hurricane season arrives each year. Experts are committed to forecasting these storms as soon as possible to save more lives and minimize damages. It is important for concerned citizens to remember that tropical storms and hurricanes are not exclusive to the coastal areas. As these storms move inland, they bring heavy rainfall, flooding, strong winds and even tornadoes with them.

There are three climate factors affecting how hurricanes form in the Atlantic. These include the following:

– Water temperatures that are warmer than average in the Caribbean Sea and the Atlantic Ocean.

– Continual atmospheric climate patterns that are part of African monsoons.

– No expected development of El Niño to suppress the formation of hurricanes.

Experts say oceanic and atmospheric conditions in the basin of the Atlantic will create stronger hurricanes in larger numbers. These include wind patterns from Africa, warmer water in the Atlantic Ocean and weaker wind shear. Experts are working on ways to improve their storm tracking abilities.

One of the new developments introduced in early 2013 was an improved forecast model. The National Hurricane Center’s communicating procedures and data gathering techniques were also improved. Experts have plans to add a supercomputer that is capable of running upgraded research to depict the structures of storms and forecast their intensity more precisely.

Additional improvements include a Doppler radar that will provide real-time transmissions to aircraft. This will make it easier for forecasters to analyze storms that are moving or developing rapidly. It will help them improve their model forecasts by up to 15 percent. The National Weather Service also made some changes to keep warnings in effect or to be reissued for stronger storms that are changing. The flexibility allows them to provide a continuous stream of warning information to the public.

Insurer Reports Sandy Flood Claims Resolving Quickly

A bulletin by the National Flood Insurance Program helped spur quicker processing of Sandy flood-related claims.

Prior to the bulletin, claims were adjusted according to the policy and guidelines established by the Federal Emergency Management Agency (FEMA), according to Jeff Moore, vice president of claims for Fla.-based Wright Flood, a federal flood insurance and excess flood provider.

“It means a signed proof of loss is required on all claims, except on claims under $75,000 when the insured co-signed the report. The policy requires the insured must follow proof of loss within 60 days from the day of the loss,” Moore said.

Bulletin W 12092a granted a conditional and partial waiver of the general conditions of the policy, Moore explained.

“It allowed…Wright flood to pay a loss based on the adjuster’s report rather than a signed proof of loss. It also stated that the 60 day time limit in the general conditions would not apply. Instead, the amount of time was extended from 60 days to one year,” he said.

Moore said that if the payment that resulted from the expedited process is in dispute, the insured has up to one year to submit a proof of loss to support their disputed or supplemental claim.

The expedited process applies to Sandy only and will not apply to any future storms, though future bulletins may be issued. Future bulletins may be modified to correct any missteps taken on earlier storms, Moore said.

“FEMA and the National Flood Insurance Program generally treat each storm differently. In this case, this waiver set forth in the bulletin was applicable to all the states affected by Sandy,” said Moore.

He said that a similar bulletin was put out for Hurricane Katrina. It extended the deadline for filing a proof of loss to one year and waived the initial filing of it in order to get payment. That bulletin expired with the deadline set forth at the one year anniversary.

The intent of the most recent bulletin was to increase claim closures quickly.

“This [bulletin] allowed quicker advance payments. It relieved our concerns about advancing money without signed documentation,” he said.

Because the proof of loss deadline was extended to one year after the date of loss, Moore expects to see a higher reopen rate.

As of Monday, January 28, 90 days after Sandy hit the eastern seaboard, Wright Flood reported it closed more than 10,000 claims.

“That’s 52 percent of our reported claims. We’ve issued close to $500,0000 in claim payments. We’re currently processing claims and issuing payments on an average of three days after we receive them,” said Moore.

The company expects to see a high number of supplemental claims.

“We anticipate there’ll be a significant number of supplements just due to the increase in pricing due to the lack of availability of heating and air conditioning equipment, and the labor to install it,” Moore said.

According to H. Neal Conolly, president of Wright Flood, of the approximately 20,000 claims received, about 95 percent are from New York and New Jersey. He said there have been about 11,300 claims in New Jersey and 7.500 in New York.

“One interesting fact is that the claim values in New York seem to be on average higher in terms of the average settlement for payment. We’re not sure exactly why that is, but the average claim with a payment is over $37,000,” Conolly said. “In New York the average claim has been about $45,000 plus; in New Jersey it’s almost $34,000.”

Another coverage afforded under the policy is Increased Cost of Compliance (ICC).

“It usually is instituted after the direct loss claim is settled, or at least substantially estimated. It’s triggered by the community. The community determines your house is greater than 50 percent damaged, it will require you to bring your home into compliance with the local floodplain management laws. If they make that requirement of you, you’re eligible for up to $30,000 worth of coverage for the incremental cost to bring your house into compliance,” Moore said.

Because many homes on the eastern seaboard are older, Moore thinks there will be a substantial number of ICC claims.

“The insurance application for a building permit will trigger that activity by the local government,” Moore said. “When they apply for a building permit, according to the rules of participation in the national flood insurance program they have to evaluate whether that home is appropriate to stay where it is at the height it is.”

If you haveany questions about your coverage or the settlement of a flood claim, contact ACBI at 203-259-7580.

Reprinted from Claims Journal.com

White House expected to seek billions in Sandy disaster aid


(Reuters) — The White House is expected in the coming days to send Congress a multibillion-dollar request to fund recovery from Superstorm Sandy, which caused an estimated $71 billion in damages in New York and New Jersey.

Congressional aides said there was no clear indication of the request’s size, but some said it would likely be at least $11 billion.

The Federal Emergency Management Agency’s disaster relief fund had access to about $7.8 billion as Sandy slammed the U.S. East Coast on Oct. 29, causing widespread destruction in coastal New York and New Jersey.

Lawmakers and analysts also said Congress will need to shore up the heavily indebted National Flood Insurance Program in the face of $12 billion in payouts resulting from Sandy, ranked as the second-worst disaster in U.S. history.

U.S. Senate Majority Leader Harry Reid, D-Nev., asked about the additional Sandy funding request, said: “Well, we can’t do anything with the disaster aid package until we get something from the White House, and I’m told that will be here as early as tomorrow or the next day.”

A White House official declined to provide any details about the administration’s plans. “We are working closely with our partners in the states and in Congress, but it’s premature to speculate on specific actions as we work to ensure the governors have the necessary support,” the official said.

Lawmakers from both parties have voiced support for providing additional disaster relief in Sandy’s wake, but a massive funding request from President Barack Obama could be disruptive to already tense negotiations over year-end tax hikes and automatic spending cuts.

If you have experienced a flood loss with Hurricane Sandy, ACBI can help you understand the complexities involved in making a claim either with NFIP or FEMA.  Call us today

Who Needs Flood Insurance?


CLICK HERE to measure the cost of potential damage to your home. All it takes is a few inches of water to cause major damage to your home and its contents. This interactive tool shows you what a flood to your home could cost, inch by inch.


Did You Know……

Floods are the most common natural disaster and most often come from hurricanes, Nor’easters and winter storms.  Flood damage also occurs from heavy rains, snowmelt and ice dams.

Losses due to flooding are NOT covered under Home or Business policies.

The average flood claim is $33,000. 

Your property has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire.

Nearly 25% of flood insurance claims occur in low to moderate risk areas.

New land development can increase flood risk, especially if the construction changes natural runoff paths.

The average flood insurance policy in the US costs $540 a year but varies based on the flood zone in which your property is located. 

It takes 30 days for a Flood policy to take effect, so it’s important to buy insurance before the flood waters start to rise.

ACBI can help you by evaluating your risk and offering the most cost effective protection.  Contact us today for more information and a quote.