Hurricane Season: The Usual Tips, Along with One Unique to 2015

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Recent National Flood Insurance Program changes may make it tempting to drop non-mandatory Flood coverage

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While hurricane coverage tends to cover wind damage, it may not cover all the water damage. Talk with your independent agent to ensure you’re properly covered. -- Talman Howard, Brightway President

Hurricane preparedness tips are well known—assemble an emergency kit, document an evacuation route and a family communications plan.

These remain as good advice. And, this year there’s something else to consider—be sure to renew the Flood policy.

Here’s why: In April, the National Flood Insurance Program began implementing Congressionally mandated reforms required by the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA), including slowing some rate increases and offering different deductible limits that may help to reduce Flood Insurance premiums.

While these are good reforms, HFIAA also mandates an annual surcharge on all new and renewing Flood policies:

  • $25/year for policies on “Primary Residential” occupancy types. These are single-family and individual condominium units, or
  • $250/year for policies on “Non-Primary Residential” (single-family and individual condominium units),” “Multifamily Residential” (condominiums and other buildings) and “Non-Residential” (non-residential buildings) occupancy types

This means that all annual Flood Insurance bills will increase by either $25 or $250, depending upon whether the insurance is on a primary residence or not.

According to the National Flood Insurance Program “everyone lives in a flood zone.” However, if the home is in a Special Flood Hazard Area (SFHA), or a high-risk area, and is financed with a federally backed mortgage, the mortgage lender requires the homeowner to have Flood insurance.

While people whose dwellings are in mandatory flood zones must buy Flood Insurance and incur the surcharge, those with dwellings outside of high-risk areas are not mandated to have Flood Insurance, but may be just as prone to a flood loss, making Flood Insurance just as important a piece of their insurance protection package.

According to the NFIP, people outside of high-risk flood areas file 25 percent of all National Flood Insurance claims each year.

“As the seventh largest property/casualty insurance agency in the country, we’ve seen about 4 percent of our customers who have residences in non-mandatory flood zones cancel their Flood Insurance policies since the new surcharge went into place,” said Brightway President Talman Howard. “This concerns us because floods are the number one natural disaster in the country. Even if you live in a low-risk zone, and even with the surcharge, Flood Insurance is a smart coverage to have, particularly as we enter hurricane season.”

Howard said: “Even if you have Hurricane coverage, where available, you should still carry Flood Insurance. While hurricane coverage tends to cover wind damage, it may not cover all the water damage. Talk with your independent agent to ensure you’re properly covered.”

“It’s always important to do a readiness assessment before hurricane season,” Howard said. “In 2015, that assessment must include ensuring you maintain your Flood policy, even if you’re in a non-mandatory zone.”

Brightway Insurance is the nation’s seventh largest Personal Lines independent insurance agency and the 117th largest privately held for-profit company with headquarters in Florida. The company began franchising operations in 2008 and operates more than 110 franchise locations in ten states. In 2015, the company was named a Top 500 Franchise by Entrepreneur magazine for the second year in a row.

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Leslie Kolleda

Jessica Ryckman
Brightway Insurance
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