Private Flood Insurance Gets Traction

Private Flood Insurance Gets Traction

“I’ve lived here for 30 years, and I’ve never seen flooding like this.”

That’s a common lament of flood victims, especially those who thought that they lived outside the flood zone of a nearby creek, river, or ocean and who have realized that their homeowner’s policy, condo unit-owner’s policy, renter’s policy or even business policy does not cover the damage caused by a flood.

As recent floods are showing, you don’t have to live in a flood zone to have flood damage. In fact, every year, a significant percentage of flood damage happens to property that is not in a flood zone. Most of these property owners do not carry flood insurance, so they are left to fend for themselves.

Traditionally, flood insurance was sold only through the National Flood Insurance Program (NFIP) which was backed by the Federal Government (FEMA). Flood zones were mapped out, and rates were standardized, depending on which “flood zone” your property happened to be in.

Well, the times they are a-changin’. FEMA recently redrew the flood zone maps, so many property owners who were not in a flood zone have suddenly discovered they are now in one. Since the passage of the Biggert-Waters Act in 2012, which was designed to reflect the true risk of living in flood-prone areas, FEMA is phasing out subsidies for higher risk properties, so many flood insurance policyholders are seeing their premiums increase significantly year after year.

Now, to the rescue comes a new product called “Private Flood Insurance,” which gives many property owners a choice. You may now be eligible to purchase flood insurance through a private insurance company at a lower rate, often a much lower rate. This private coverage is typically written by what are known as Surplus Lines Insurance Companies, which means they are not licensed by the PA Insurance Department and are not covered by the PA Property and Casualty Guaranty Association, but this has nothing to do with the financial strength and stability of the carrier. In fact, the largest surplus lines carrier selling flood insurance in Pennsylvania is Lloyd’s of London, according to a PA Insurance Dept news release.

Ronald Ruman, director of communications at the PA Insurance Dept., recently said that Pennsylvania Insurance Commissioner Teresa Miller asked her staff to look at ways to help homeowners find affordable coverage and found that in many cases, comparable flood insurance coverage was being offered through the private market at much lower rates than those offered through NFIP.

The bottom line is that if you own property, whether it’s a home, a business, or an investment, you should at least be considering flood insurance. The good news is you may no longer be locked into dealing with the government program or the government rates. If your agent has not informed you of this new option and you might even remotely be interested to see if you qualify, reach out to our flood insurance team.


Ross Insurance | 1496 Lititz Pike, Lancaster, PA. 17601
717.397.4729 |