Flood Insurance: What to Know, What to Question, and How We Can Help

Flood insurance doesn’t come up often – until it does. Usually it’s during a property acquisition, a refinance, or a lender review. Suddenly, there’s a requirement for high-cost coverage and a tight timeline to get it placed. But not every flood insurance requirement is set in stone, and not every policy is priced correctly.

Here’s what to consider when flood insurance is on the table, and how your insurance broker can help you manage it strategically.

Flood Insurance Basics

Flood insurance protects against damage caused by rising water, and it’s typically excluded from standard commercial property policies. If a property sits in a high-hazard flood zone, referred to as a Special Flood Hazard Area (SFHA), most lenders will require coverage through the National Flood Insurance Program (NFIP) or a private carrier.

Even if your property isn’t in a mapped flood zone, it’s still at risk. In fact, about 25% of flood claims come from properties outside SFHAs.

What to Watch For

Whether you’re required to carry flood insurance or considering it voluntarily, here are a few things to keep in mind:

• Flood zone accuracy: FEMA maps aren’t always up to date or precise. Properties can be misclassified, and maps can be challenged.
• Premium differences: Two similar properties might have vastly different flood premiums based on location, elevation, and policy structure.
• Lender requirements: These vary depending on the loan type and the lender’s risk policies. Some require full replacement cost coverage; others are more flexible.
• Coverage options: NFIP is common, but private market alternatives may offer better pricing or broader terms.

These variables can be difficult to navigate, especially under a deadline.

How Your Insurance Broker Can Help

As your insurance broker, we do more than check the flood insurance box. Our role is to help you understand the requirement, verify the risk, and explore ways to reduce the cost without compromising coverage.

We work with trusted engineering consultants who specialize in reviewing flood zone data and challenging designations when appropriate. Together, we’ll gather the right documents, evaluate your property, and determine if there’s an opportunity to:

• Reclassify the property into a lower-risk flood zone
• Eliminate or reduce the lender’s insurance requirement
• Secure better pricing or more favorable terms through the private market

If a correction is possible, our partners handle the process with FEMA. There’s no cost to review your property, and fees are only incurred if we find a successful solution. You see the savings first.

It’s About More Than Compliance

Flood insurance can have a major impact on your property’s operating expenses, cash flow, and long-term value. Whether you’re buying, holding, or selling, it’s worth reviewing every property that sits in or near a flood zone.

Let’s take a closer look. A short review today could mean big savings for years to come.