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Flood Insurance

Flooding is not a covered peril under your homeowners or business insurance policy. You must have a separate, stand-alone flood insurance policy to be covered for flood waters damaging your home or business. There are a couple of insurance carriers who offer a homeowners/flood combo, but the flood portion is not underwritten by NFIP, and buyers should exercise their due diligence in understanding the exact coverage being offered. At this time, Fulshear Insurance® has chosen not to represent these carriers and does not offer this type of package.

Let’s be familiar with the terminology used when discussing flood insurance.
FEMA is Federal Emergency Management Agency.
NFIP is National Flood Insurance Program.
Flood insurance underwritten by the federal government is a product of NFIP and approved by FEMA, the agency of the federal government.

Within the last year, NFIP implemented the Risk Rating 2.0: Equity in Action flood program, which replaces the flood program as we have known it.  The change for new policies was implemented October 1, 2021, and renewal policies saw the change beginning with renewals effective April 1, 2022 and later.  There is no longer a fixed rate for preferred zones with identical coverage.  Other factors, such as land elevation, is now being considered for all properties instead of just the properties located in Zones A or AE.  Some homeowners will see their premiums decrease, but the vast majority will see increases to their premium.  An existing flood policy will see up to 18% increases each renewal until the policy reaches the new premium for the Risk Rating 2.0: Equity in Action program.  New policies will be issued at the full rate.  In some cases, new policies will be issued at a lower rate due to the decreased premium resulting from the Risk Rating 2.0: Equity in Action program.  We have already seen this happen with a few cases in the Fulshear-Simonton area.  

According to FEMA, most homes in moderate and low-risk areas qualify for the NFIP Preferred Risk Policy. FEMA statistics show if you live in an area with low or moderate flood risk, you are 5 times more likely to experience flood than a fire in your home over the next 30 years. 

It is important to understand the different types of flood insurance policies and what may or may not be covered under each policy. What is NOT covered is just as important as what IS covered.

NFIP flood policies are summarized as follows:

  • NFIP flood policies offer a maximum coverage of $250,000 dwelling and $100,000 contents/personal property.
  • A standard NFIP flood policy pays for the replacement cost of your home or the actual cash value of damages, up to the policy limit. Flood insurance does not have a guaranteed replacement cost policy that will pay above the liability limit.  Policies pay out to policyholders based on either replacement cost or actual cash value.  The type of claim determines how the claim is adjusted.
  • NFIP flood policies do not offer coverage for “other structures” including pools, decks, fencing, storage buildings, etc.
  • The NFIP flood policy does not include coverage for ground erosion around or under a foundation.
  • The NFIP flood policy does not include coverage for “loss of use” or additional living expenses. If you have to relocate while your home is being repaired, there is no additional benefit through the NFIP policy to assist you with the additional expenses.
  • There is a 30-day waiting period for the NFIP flood policy to be effective if you already own the home when you obtain the policy or it is for a cash purchase closing.
  • There is no waiting period for a NFIP flood policy if the policy is written on or before the day of closing, and there is a mortgage on the home being purchased. This does not include private mortgages such as loans from family members or other related parties.

The replacement cost value is the cost to repair or replace a part of the home that is damaged, with a deduction for wear and tear. For you to be eligible for the replacement cost value, you must meet three conditions:

  1. Your home must be a single-family dwelling;
  2. Your home must be your principle residence at the time of loss, meaning you live there 80 percent of the year; and
  3. your amount of flood insurance for building coverage must be at least 80 percent of the full replacement cost of your home, or be the maximum amount of insurance available for the property under NFIP.

The actual cash value is the replacement cost value, less depreciation for physical wear and tear.

  • Some items such as appliances and carpeting are always adjusted at the actual cash value.
  • Personal Property is always adjusted at the actual cash value.

Private Flood Insurance is an alternative to NFIP Flood Insurance. Private Flood is summarized as follows:

  • Dwelling Replacement Cost coverage available up to $1million.
  • Contents or Personal Property offers an option for Replacement Cost.
  • Other Structures coverage is available with Private Flood Insurance.
  • Additional Living Expenses or “Loss of Use” coverage is available with Private Flood Insurance should you be displaced while your home is being repaired due to damage from flood waters.
  • Private Flood offers a shorter waiting period of 0-14 days depending on the insurance company.

Excess Flood is an additional flood policy that offers coverage beyond a NFIP or Private Flood insurance policies. It is coverage in excess of the NFIP or Private Flood insurance policies.

Carrying flood insurance on your home offers you peace of mind when it rains. In some cases, it costs less than a cup of coffee a day. The weather is unpredictable, so it’s important to be prepared for the unexpected. Flood Insurance is a measure of financial protection to protect your assets in the event of flooding. It is so much better than "hoping" your area is declared a federal disaster area, so you can qualify for federal disaster assistance.  In most cases, disaster assistance is a loan and must be repaid, but proceeds paid via flood insurance is yours to keep and use for repairing your home. Flood Insurance is always the better choice.

It is always a good time to talk about flood insurance! Call your trusted advisors at Fulshear Insurance® to set your mind at ease and put your home or business flood insurance policy in place today. Toll free: 1.855.533.9067 or send us an email with your inquiry: Info@FulshearInsurance.com

For more information regarding floodplains, see the following floodplain mapping tools:

Fort Bend County, Texas

Harris County, Texas

Read more about flood insurance:  Myths and Misconceptions

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