National Flood Insurance Program VS. Private Flood Insurance - YouTube

hello chris green here with the flood insurance  guru and today we're talking about national flood  

insurance program versus private flood  insurance the battle which one is better  

it's a question we hear every day and also  people want to know the differences so we're  

going to talk a little bit about that you know  we addressed this in a video several years ago  

but there's been a lot of changes and so we're  going to talk about understanding the difference  

between the national flood insurance program and  private flood insurance let's start with coverage

let's start with coverage amount  of residential first of all  

now generally on a residential building  with the national flood insurance  

program you've got 250 000 for the building  like you can see right here behind us and you  

got a hundred thousand dollars for contents  which are the things inside this building  

with private flood insurance you might be able to  go up to the millions in building inside the for  

the building coverage you know we help people  with this all day long on commercial buildings  

now remember commercial buildings are also  a little different with the national flood  

insurance program but on residential private flood  insurance does not max out at 250 000. it doesn't  

max out at 100 000 it could be a great benefit  you know what if you're building floods and you  

need a temporary place to stay unfortunately  that's not really coverage the national flood  

insurance program offers but that's something  that you can get with private flood insurance  

then there's also wait periods you know if it's  for loan closing the national flood insurance  

program doesn't have a wait period neither does  private flood insurance other than that maybe a  

newly mapped area the national flood insurance  program generally has a 30-day wait period  

with private flood insurance this weight period  could range from one day to 15 days so you can  

see there's some big differences here now one of  the biggest differences that can be is pricing you  

know we've seen it where private flood insurance  is 30 40 50 less and people just don't understand  

why such a big difference one reason is technology  the two systems kind of use some different things  

when it comes to rates you know the fl the  national flood insurance program historically  

uses flood zones like flood zone a ae x and a  lot of these rates are based on these flood zones  

they may also be based on things on an elevation  certificate when private flood insurance is  

using some different technology to calculate  what's called a flood risk score and so many  

times a private flood insurance policy could be  higher than the national flood insurance program  

especially if it's a grandfathered policy so these  are some differences between the national flood  

insurance program and private flood insurance now  let's talk about if your bank would accept if you  

have a mortgage it's really important as we shoot  this video generally the fha loans do not allow  

private flood insurance it has to go through fema  now fha is supposed to be meeting to hopefully  

change the skyline but as we shoot this video fha  still requires you to go through fema now that's  

important because if you're going through and  doing a national flood insurance program with an  

fha loan you know something you want to understand  because you don't want to go and present an office  

or even maybe pay out of pocket come to find out  it's not going to be accepted now generally the  

other loan types like conventional loans you can  go to the private market you know the fdic did  

a ruling back in 2019 that stated how banks could  accept private flood insurance and we've also seen  

it where usda and va loans also accept private  flood insurance so these are some differences  

so which one is better you know that's kind  of a trick question because it depends on  

your risk like you can see right here it could  be that the national flood insurance program has  

a better option for you this close to water  you know it could be maybe that your property  

has claims on it putting maybe on a severe  repetitive loss list or repetitive loss list  

or maybe fema is your only option or the best  option for you so it's not really that one is  

better than the other it depends on each unique  situation so if you have questions about trying  

to figure out what your best option is the  best way to protect your property from flooding  

click below to visit our website flood  insuranceguard.com remember we have an  

educational background flood mitigation which  means we can help you understand flood risks  

i guess right here your flood insurance and  mitigating your property long term thank you