No More Flood Insurance!! HUGE MONEY!

[401Killer]

After being in my house for about 16 years and paying federally required flood insurance at around $1400 to $1500 a year, I was able to get our house's status removed for requiring the insurance! In the last 2 years alone we have paid $4635 in flood insurance! In 2015 we are paying basically $233/mo for it. Easily wasted $25,000 paying this bill over the years and its FKN FINALLY GONE!!

[Bajadoc]

Never buy a house in a special flood hazard zone.

[Blueskies123]

If you live in flood zone you might be making a huge mistake.  Did you try to raise the deductibles?  I live on a lake in a hurricane zone and pay about $500 a year.  Your rate sounds outrageous at over 200 a month.  You must live on the inter-coastal or some other high risk area.

[401Killer]

If you live in flood zone you might be making a huge mistake.  Did you try to raise the deductibles?  I live on a lake in a hurricane zone and pay about $500 a year.  Your rate sounds outrageous at over 200 a month.  You must live on the inter-coastal or some other high risk area.

I live in a large neighborhood and only the back corner required it. So like 6 houses out of hundreds required it. In the almost 200 year history of the city there has never been a flood(Michigan). I don't live on the water as well...

So, no huge mistake made. The rate for 14 of the 16 years was around $1400. The last two years it jumped up for some reason.

[Gone Fishing]

What did you do, get an elevation survey?

[Gekko]

I'm also interested in what you did to remove the flood insurance requirement. Sounds like your house wasn't really in a high risk area.

My last house required flood insurance which always annoyed me since there were no recorded incidents and the house was over 50 years old. Fortunately, the rates were fairly low. In my last year of ownership, it flooded. Only had about a half inch of water on the inside, but the total claim was about 50% of the value of the house. This didn't include the damage to all our vehicles and belongings.

[K-ice]

I find insurance is one of those "dammed if you do, dammed if you don't" things.

From what I read in a recent policy, flood insurance only covers if a "body of water" overflows and floods your place. So unless you live close to a lake, river or ocean I do not see the point.  I think those manmade lakes in new suburbs count too but I would double check. And if you do live close to those things, flood insurance is probably super expensive. 

It didn't include leakage and seepage, surface water running through basement windows or any water coming thru doors.
"Water damage" is different and seamed to cover broken interior pipes.  But it would not cover water from a broken tank used to store water for fire fighting purposes.  (OK so your Condo is trying to be responsible by having a water storage tank so the place doesn’t burn down but if that tank breaks you are screwed.)

Sewer back-up is another thing all together, but usually only covers if the back-up is inside your house.  Your neighbour could literally have a “shit storm” that somehow leaks over to your place and you would not be covered.

Also, I could not find anything that would cover if there was as major storm and there were just excessive amounts of water, filling up your yard and/or running down the street and into your house. 
What if in a major storm your nasty neighbour has their eaves pointed straight at your side yard and window.

Or what if a city water main breaks and “floods” your place? Sure you can sue them, the neighbour, the city, whoever, but I would rather my insurance provider just cover me and then they know how to deal with collecting from the source.

Major storms or city issues are probably my most likely situation. I know some people that have had basements flood due to this and, they assumed they were covered, but no luck.

I would consider any water coming into my house and making the floor more than 2” wet a “flood”. Does anyone know what that is called in insurance lingo? 

Do you know if YOU are covered in those cases, and has insurance stepped up when you needed them?


PS.  The policy also covered mold.....  But the fine print didn't cover fungi or spores.  Seriously? Does anyone know the difference? Sounds like an excuse for them to run some tests and then not cover you. What mold is not fungi or spore based?

[Gekko]

Also, I could not find anything that would cover if there was as major storm and there were just excessive amounts of water, filling up your yard and/or running down the street and into your house. 
What if in a major storm your nasty neighbour has their eaves pointed straight at your side yard and window.

Or what if a city water main breaks and “floods” your place? Sure you can sue them, the neighbour, the city, whoever, but I would rather my insurance provider just cover me and then they know how to deal with collecting from the source.

Major storms or city issues are probably my most likely situation. I know some people that have had basements flood due to this and, they assumed they were covered, but no luck.

I would consider any water coming into my house and making the floor more than 2” wet a “flood”. Does anyone know what that is called in insurance lingo? 

Do you know if YOU are covered in those cases, and has insurance stepped up when you needed them?

I'm no insurance expert, but I can speak from my own experience. In my situation, our area had excessive amounts of rain over the course of several months which left the ground totally saturated. One night around 1 AM my neighbor started frantically knocking on our door and when I opened it, I saw at least 2-3 feet of water in our front yard. We had gone to bed around 11 so it all happened in less than 2 hours. Checking weather reports the next day I discovered we had over 4 inches of rain in about 30 minutes that night.

We had FEMA flood insurance and filed a claim in the morning. They sent an adjuster that day and he assessed all the damage. Nobody asked why the house flooded or where the water came from. However, it was pretty obvious that this was a catastrophic flood, regardless of the source. Check out the attached picture of our front door. For reference, the porch was about 3 feet above ground level.

[401Killer]

Local company called True North Surveying has cards dropped in mail boxes. States:

FEMA has issued updated flood maps for your community. If your lender requires you to carry flood insurance or your property has been newly added to a flood zone, please contact us....

They come out for a fee and take the measurements. If you still require it, you loose the basic fee. If the insurance can be removed, you pay them a bit more and take care of the paper work. What you are supplied with is paperwork called Letter of Map Amendment or LOMA paper. This is the document you need to send to the lender and whoever else to have the coverage removed.

http://www.fema.gov/letter-map-amendment-loma

Letter of Map Amendment (LOMA)

The purpose of this page is to define a Letter of Map Amendment (LOMA), a commonly used term in floodplain management.

Definition/Description

A Letter of Map Amendment (LOMA) is an official amendment, by letter, to an effective National Flood Insurance Program (NFIP) map. A LOMA establishes a property''s location in relation to the Special Flood Hazard Area (SFHA). LOMAs are usually issued because a property has been inadvertently mapped as being in the floodplain, but is actually on natural high ground above the base flood elevation.

Because a LOMA officially amends the effective NFIP map, it is a public record that the community must maintain. Any LOMA should be noted on the community''s master flood map and filed by panel number in an accessible location.

[jba302]

PS.  The policy also covered mold.....  But the fine print didn't cover fungi or spores.  Seriously? Does anyone know the difference? Sounds like an excuse for them to run some tests and then not cover you. What mold is not fungi or spore based?

Mold is a type of fungus, so none. On the plus side, this means that it's just flat covered. Since insurance policies are unilateral, any confusion or contradiction is favored towards the insured in a legal situation. Maybe you misread the policy wording? That seems egregiously stupid to put something like that in there.

[Rosy]

Sweet savings - congrats on the amendment to the flood zone map.

A good reminder for us to re-check whether we are still in the 100 year flood zone. There have been a lot of drainage improvements in our area and since the family owned the house since 1958 there has never been water in the house. Standing water in the yard yes.
Our little bungalow is not flood insured, it is a risk we are quite willing to take, we are 30 minutes away from the beach. Of course, if you do not own your property you have no choice - go with the highest deductible that you can afford or forget about living anywhere near the water.

Florida is the pits for homeowners insurance, a few years back all you could get was insurance through the state, because of all the hurricanes in our area. Then it loosened up and they kept flooding us with letters to change our insurance company from Citizens (state) to a regular insurance company for a cheaper rate.
The problem was some of these were start-up companies with not enough back up capital if the shit hits the fan - it did and a lot of people who thought they made a clever choice by finding cheap insurance found themselves with worthless insurance coverage - the companies went bankrupt.

Insurance companies are supposed to have enough liquidity set aside to handle any claims, they are allowed to seek re-insurance themselves so the risk is spread between companies - works in theory and has been proven to work in most situations. The State Insurance Board in Florida is a farce, the State Insurance Commissioner, well, you get my drift.

Anyway, since I have a background in commercial property insurance including reinsurance on a global basis it is easy for me to ascertain what is really going on - so yup, Florida Insurance is about as corrupt as it gets.

The one thing that outraged us the most, is that Citizens tried to force us to replace our roof - which was old, but in good shape (no repairs, no leaks) - they just had a rule about the age and sent us a letter of non-renewal unless we replaced it. We were not quite ready to replace it yet. So we lived without home insurance for a couple of years, then we put on a nice new metal roof and Citizens welcomed us back:) into the fold.

If you have a nice house and want to shop around for a better premium that is fine, but do not forget to check their Best rating (Triple A is top rated) and talk to a real Independent Insurance Agent about the financial strength of that company and how easy they are to deal with when it comes to adjusting your claim. A quick 5 minute quote on the internet is not a smart choice - do your due diligence.
 I think most of us can survive losing a car, but losing a home is a different matter altogether. Know and review your coverage and talk to an expert, before you decide to shave off a couple hundred bucks on your insurance premium for your 450K home - it may be the dumbest decision you ever made.
Higher deductibles will save you money, but sometimes the difference is not worth it - but half the time it is.

If you have a question about your policy - ask it and get it in writing. You don't want an off hand answer that may cost you thousands later on. If you have a peculiar situation, bring it up to your agent and see if you can secure coverage via a special endorsement to your policy.
A good insurance agent, the independent kind who can work with any insurance company, is worth their weight in gold and can save you thousands.

I am not an insurance agent, but I was an underwriter for three of the top five insurance companies in the US and globally. Don't take anyones word for what your insurance contract covers or how to interpret it - go to the source and get it in writing. Laws and coverage change all the time so while it is useful to discuss here in this forum, the final answer lies with the company who wrote your insurance policy.
Policies can be endorsed (changed) at any time. By the time renewal rolls around it is a new game every time - due diligence is up to you.

These policies are written by professionals and while I used to be that professional who could draw up international contracts I am no longer in the business. So what I say in this forum is nothing but my personal opinion or experience.

Who knows what they mean by mold without seeing the policy and all its endorsements - the mold as a direct result from your flood or from other water damage which was not properly and quickly dealt with? Water damage is tricky and like you already found out coverage varies wildly depending on the cause.

Insurance companies attempt to shift as much risk as possible to you, but it is still a contract and contracts can be amended and that is the reason why a large business needs an insurance department and why an individual is better off with an independent insurance agent - because they will act on your behalf to negotiate, to reduce or even cover your risk 100%. All for a price of course:)

[forummm]

That's some great savings! Fortunately our house is built on the top of a hill on our lot, and even the streets on both sides of the house are well downhill from the house, so I didn't even bother to get the flood insurance in the first place. Just as long as gravity keeps working, I'm OK.

[SwordGuy]

We just spent $33K buying a house that's in the 100-400year flood zone.  We'll probably put another $10-12K into it.

I spent $300 for $20k house and $8k contents damage from flooding.   $1k deductible.

The risk is fairly low and it's not likely to float the house downriver, so that $28k insurance should pretty well cover the bulk of any flood losses. 

[Rezdent]

PS.  The policy also covered mold.....  But the fine print didn't cover fungi or spores.  Seriously? Does anyone know the difference? Sounds like an excuse for them to run some tests and then not cover you. What mold is not fungi or spore based?

Mold is a type of fungus, so none. On the plus side, this means that it's just flat covered. Since insurance policies are unilateral, any confusion or contradiction is favored towards the insured in a legal situation. Maybe you misread the policy wording? That seems egregiously stupid to put something like that in there.

Just had a coworker go through this, there was a leaky pipe inside a wall that wasn't apparent, they were having some maintenance done and rotten wood and black mold was discovered.  Most of one exterior wall, section of floor, kitchen cabinets need replacing - big money.
Mold was covered under their policy but the company refused to pay for it, because they had a clause in the contract that they wouldn't pay for water damage more than two weeks old.  Wtf?
CW has lawyered up.

[jba302]

Just had a coworker go through this, there was a leaky pipe inside a wall that wasn't apparent, they were having some maintenance done and rotten wood and black mold was discovered.  Most of one exterior wall, section of floor, kitchen cabinets need replacing - big money.
Mold was covered under their policy but the company refused to pay for it, because they had a clause in the contract that they wouldn't pay for water damage more than two weeks old.  Wtf?
CW has lawyered up.

Generally speaking, maintenance based problems are not covered by insurance. The cause of the mold in your co-worker's situation was a leaky pipe which is a maintenance issue. The wording in the clause is odd but that is the underlying intent. Mold has to be a result of a covered loss, for example a windstorm ripping open the roof and water getting into the walls.

Rosy makes a good point as well - when in doubt, get a letter from your agent about the intent of the coverage or from the underwriter. The agent would be sufficient if you requested a specific coverage intent since a gap would be an E&O claim against them. If you don't get clarification, you end up at the mercy of the adjuster. I worked as one at one of the big companies in the past, both normal claims and CAT work (hurricanes and floods), and let me tell you - if you are at the point of a claim, it's way too late to get a situation clarified. Homeowners policies are pretty easy to interpret but people don't have the opportunities to see the nuances that are in policies (which are there for a reason!) and tend to over-assume.

[401Killer]

A VERY important tip the people that provided this service mentioned is that you can still purchase flood insurance if you want to. The thing is that because your home is no longer considered in a flood zone, the premiums are much, much cheaper. So it may drop down to a few hundred a year or something.

[Gekko]

A VERY important tip the people that provided this service mentioned is that you can still purchase flood insurance if you want to. The thing is that because your home is no longer considered in a flood zone, the premiums are much, much cheaper. So it may drop down to a few hundred a year or something.

Excellent point. After moving out of our flooded house, we've been super paranoid. Where we live, almost every house is low and close to, or in, a flood plain. Our new place is not in a flood plain but is low so we got the maximum available flood insurance coverage. The annual premium is ~400/year.

[TVRodriguez]

Our little bungalow is not flood insured, it is a risk we are quite willing to take, we are 30 minutes away from the beach. Of course, if you do not own your property you have no choice - go with the highest deductible that you can afford or forget about living anywhere near the water.

Florida is the pits for homeowners insurance, a few years back all you could get was insurance through the state, because of all the hurricanes in our area. Then it loosened up and they kept flooding us with letters to change our insurance company from Citizens (state) to a regular insurance company for a cheaper rate.
The problem was some of these were start-up companies with not enough back up capital if the shit hits the fan - it did and a lot of people who thought they made a clever choice by finding cheap insurance found themselves with worthless insurance coverage - the companies went bankrupt.

Insurance companies are supposed to have enough liquidity set aside to handle any claims, they are allowed to seek re-insurance themselves so the risk is spread between companies - works in theory and has been proven to work in most situations. The State Insurance Board in Florida is a farce, the State Insurance Commissioner, well, you get my drift.

Anyway, since I have a background in commercial property insurance including reinsurance on a global basis it is easy for me to ascertain what is really going on - so yup, Florida Insurance is about as corrupt as it gets.

Congrats to OP on getting the new zoning!

Thanks to Rosy for your informative post!

We're in Florida, too, and I got Flood Insurance awhile back, and DH has been pushing me to cancel it for years.  It's now about $460/year. 

Citizens regularly tries to kick us out to another insurer for regular homeowners insurance, and sometimes we do it for a year or two and then go back to Citizens for a year or two.  Our $325K house costs us ~$4600/year in HOI for the "cheaper" insurance company b/c we have an old roof (installed by prior owner in 1992 post-Andrew) that's not gabled and has the "wrong" clips.  I keep meaning to check on deductibles --  see if we can raise it to reduce the premium.  DH wants to drop HOI entirely b/c the house is paid for, but I'm not willing to risk it b/c we do live in South Florida.

[Milspecstache]

I had a rental that was in a flood zone (only worth $170k).  I had a plan to pay it off and cancel the flood insurance but then FEMA changed my rate from $350/yr to $700 by requiring an administrative fee since I didn't live in the house.  Coupled with my already insane taxes I decided I couldn't make a profit and sold it this summer.

Oh, and recently the house I just built in a different state was placed in a flood zone by FEMA (wasn't when I got the permits in 2011).  Bonus here is that the house is paid for so I couldn't care less.  Not paying their ridiculous prices.

I hate FEMA and hate flood insurance and will never purposely build/buy in a flood zone where I am forced to pay their fees that can be changed at a moment's notice.  Some of you may have success stories but I do not.