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  • Writer's pictureMichael Chambers Heer

Neptune Private Flood Insurance vs FEMA Public Flood Insurance (NFIP)

What is Flood Insurance?

A flood insurance policy protects your home against damage caused by flooding. Flood insurance covers the cost of repairing or rebuilding your home (building coverage) as well as your personal belongings (contents coverage) up to the limits set in the policy. Homeowners policies do not provide coverage for flood damage. So, flood insurance was developed to cover that gap.

Do I Need Flood Insurance?

Nearly every home is at risk of flooding, not just those in high-risk flood zones. Of course, if you live in a high-risk flood zone, your mortgage company will require you to purchase flood insurance. But for most homeowners, flood insurance is optional. You may want flood insurance if your home sits near water, is at the bottom of a hill, has a basement, or sits on flat land. Most flood damage is not caused by coastal storm surge, but rather by heavy rain. During Hurricane Ian in 2022, many homes in central Florida far from the coast experienced prolonged flooding after as much as 12” of rain fell. During Hurricane Irene in 2011, my parents’ home near Crofton, Maryland experienced a flood in the basement. They were never concerned about flooding as the yard sloped away from the home, they were far from the coast, and not near a flood zone. The yard never flooded during Hurricane Irene, but the ground became so saturated that water entered the basement. With no power, the sump pump couldn’t remove the water.

What Are the Types of Flood Insurance?

When you think of flood insurance, you probably think of public flood insurance through the National Flood Insurance Program (NFIP), a government program administered by FEMA. These policies and their pricing are set by FEMA. CB Chambers Insurance issues NFIP policies through The Hartford Insurance.

You may be less familiar with private flood insurance. Private flood insurance is not part of the National Flood Insurance Program. If you want more flood coverage than is allowed in the NFIP, you will need private flood insurance. And even if you don’t need more coverage, sometimes private flood insurance is less expensive. CB Chambers Insurance issues private flood insurance through Neptune Insurance.

What Is the Difference Between Public and Private Flood Insurance?

Public flood insurance through the National Flood Insurance Program (NFIP) serves as the base policy for most homes with flood insurance. The program actively insures 3.4 million homes and covers 91% of the flood policies in the United States. For decades, flood insurance was considered too big a risk for most insurers, leaving homeowners without options. With nearly 75% of declared disasters in the U.S. involving flooding, the NFIP was created in 1968 to offer universal access to flood coverage. NFIP policies have a maximum coverage of $250,000 for dwellings and $100,000 for contents. However, any program designed for the masses is not going to be right for everyone. In addition, the flood maps and rating technologies used by FEMA can be very old and antiquated.

In contrast, private flood insurance is purchased from a private insurance company and is not regulated or backed by the government. The rating guidelines and algorithms are different. In fact, private insurance applications have fewer questions. In some cases, private flood insurance can be 50% less expensive than FEMA flood insurance. Perhaps one of the greatest benefits is the ability to customize the policy. Neptune allows dwelling coverage up to $4,000,000 and contents coverage up to $500,000. You can add several optional coverages that are not offered by the NFIP:

  • Replacement cost for contents coverage: Your belongings are replaced with new items rather than an actual cost value (ACV) settlement.

  • Temporary living expense: When a covered claim forces you to leave your home, Neptune Flood can help pay for lodging or the cost of eating out up to $10,000.

  • Basement contents coverage: Standard NFIP policies limit basement coverage to attached fixtures and select appliances. Neptune Flood can insure up to $10,000 in personal property in your basement.

  • Pool Repair & Refill: Standard NFIP policies exclude pool coverage. With Neptune, you can choose the coverage you need to repair and refill your pool after a covered loss.

  • Coverage for additional buildings: Protect additional buildings on your property with up to $50,000 in added coverage for all unattached structures, such as detached garages, pool houses, and more.

About Neptune Flood Insurance

Established in 2016, Neptune Private Flood Insurance was developed to bring affordable coverage to owners of high-value homes. In 2022, Neptune became the largest private flood insurance company in the United States. Neptune Flood uses LiDAR technology, the same tech used by NASA and the US military, to build its flood risk maps. Neptune is backed by some of the largest insurance and reinsurance companies including Lloyd’s of London, the largest insurance company in the world. Neptune has been featured in Forbes, CNBC, and Yahoo Finance among others. Neptune holds a Better Business Bureau rating of A+ and an A rating from AM Best, the insurance industry rating group.

How Much Flood Insurance Do I Need?

That answer depends on the home and the flood risks it faces. If your home is in a flood zone and your mortgage company requires flood insurance, they likely only require the limits available through the NFIP ($250,000 for the building and $100,000 for the contents).

However, you may wish to purchase more coverage. If your home is in a high-risk flood zone, is near water, or you believe your home has a significant flood risk, you may wish to insure your home to the full replacement cost (same limit as your homeowners policy).

If you only have a small concern of flooding such as protecting your basement, you might only need a small amount of coverage such as $50,000. Of course, this decision is likely to be driven by the cost of coverage. Depending on the location of your home, flood insurance could range between a few hundred dollars a year to thousands. Contact us today to request a free flood assessment and quote.

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