FEMA Flood Law Changes October 2018 – Now You Can Move to Private Flood Insurance At Any Time

Many people in coastal South Carolina in areas like Mount Pleasant, Charleston, Isle of Palms, Sullivan’s Island are unaware of the new FEMA flood rule that allows one to move their FEMA flood policy, at any time, to the private flood insurance market.  So what does this mean for YOU?

Due to this massive change (FEMA flood rule 26 – part of the WYO Bulletin W-18008), you can now move your flood insurance policy from FEMA to a private flood insurance company that can possibly save you 50% or more in many cases.  There are a few specifics that one must follow in order to do so, but it is not that hard when you are working an agency that understands the new rules and what needs to happen.

Below is a brief overview of the rules and guidelines in order to make this move and start saving.  We know this can sound confusing but again, if you are working with an agency that specializes in flood insurance, they can help make this process go as smooth as possible for you.

• The private market/non-NFIP policy must be for building coverage on the same building that is insured by the NFIP policy being canceled.
• Cancellation Effective Date: The date cancellation request is received by The Flood Insurance Processing Center
• Cancellation Request: Must be received within the current NFIP policy year
• Refund will be pro-rata less the Federal Policy Fee and Probation Surcharge (if applicable). Only the current year premium is eligible for the refund
• Required Documentation: A copy of the non-NFIP policy declaration page and a statement from the mortgagee, if any, accepting the non-NFIP policy as a replacement
• Contents only policies are not eligible for this cancellation type

Other questions that have come up to us thus far:

• Many people are asking, what is the “federal policy fee” and “how much is that” since it is non-refundable.  For most people, this is a $50 fee.
• What does “pro-rated” mean?  Think in terms of a 365 day year or even easier a 12 month year.  Let’s say that your current FEMA flood policy is effective 8.1.2018 and you want to move your policy effective 11.1.2018.  You “used” 3 months of your policy so you are entitled to 9 months of your premium back, less the $50 federal policy fee.
• How long will this process take?  We are not 100% sure, however, when a typical policy is canceled at renewal or due to a home closing, it is fairly quick and the refund is processed within the week.
• Do I have to let my mortgage company know?  Yes.  This is part of the deal.  You must get a statement from your mortgage company that they are OK with you moving to the private flood market.
• Will my mortgage company approve this move?  In every case we have been involved in with private flood insurance, 100% of mortgage companies and lenders have approved the private flood insurance that we offer.

So what should you do next?

We recommend to contact us (below) and provide us with a copy of your current flood insurance policy.  If you have an elevation certificate, please provide that as well.  We will do the research from there and help you determine which of our private flood insurance companies will be best for your situation and we go from there.  Fair enough?