Joe Flood can take complicated cases and make them easy (and save you money).Out Of Compliance Building
When a building does not follow all the rules of the National Flood Insurance Program during construction, the situation can turn complicated quickly. The NFIP, and private flood, can be expensive and options can be limited.
The NFIP has certain building standards that need to be met when new buildings are constructed in high risk flood zones in order to reduce the possibility of flooding. When these standards are not met, flood insurance can be very expensive.
An insured lived in a building not built to the correct NFIP standards at the time of construction in a VE flood zone. The insured asked Joe flood to look for alternative coverage. The insured had secured a private flood policy for $12,000 in annual premium. When built, the lowest floor of the building should have been design with break away walls, be less than 300 sf in size, and with all utilities raised above the Base Flood Elevation. However, the lowest floor was a fully enclosed, finished area with solid walls. The VE flood zone the building was in had a Base Flood Elevation of 19 feet. The lowest floor sat at 10.5 feet, a negative elevation of almost 9 feet.
All of Joe Flood’s private options were higher than $12,000 in annual premium, so he submitted the risk to the NFIP for something called “submit for rate” consideration. Submit for rate is a method in which the NFIP does not simply rate to the lowest floor. They “load” for certain things. They take certain building characteristics into consideration, such as the size of the lowest floor, the use of the enclosure, utilities locations, and more. It provides a different rating from standard rating from the NFIP manual.
After submit for rate was applied, the result was a rate and premium better than what private flood could offer, at about $9,500 in annual premium. This supplied similar coverages as private flood, and lessened the burden of the cost of flood insurance. What started as a complicated scenario, was solved through taking a different approach to rating the building.