How do I get a preferred risk premium on flood insurance?
June 20, 2010 by
Filed under condo insurance quote
I live in a low risk (Zone X, not within a 500-year floodplain) condo.
I log on to floodsmart.gov, and there are two schedules for Zone X:
- “Preferred” risk
- “Moderate to Low” risk
Preferred risk premiums are about 1/3 the price of moderate to low risk premiums. According to the website, most people in moderate to low risk areas qualify for preferred risk.
However, when I got a quote, I did not get preferred risk, so flood insurance costs over $1000/year for my $125000 condo. This seems like a ripoff since my odds of flood are nearly zero.
I suspect that my agent is trying to inflate the bill, but I have no idea what qualifies a property for preferred risk. Does anyone have a clue what determines if a property qualifies for preferred risk vs. moderate/low risk?
It will depend on the state you are in. In Louisiana, after Katrina prices soared on flood insurance even if you are not in a flood zone. I would get another quote if I were you.
Flood insurance is written through a Federal Program. They have maps of areas that tell them the percentage of risk. Your agent has nothing to do with the amount you were quoted. It’s Uncle Sam.
It’s PURELY about location. The agent can’t “tweak” the ratees AT ALL – the agent has no power to do that, or change your rating.
The houses on either side of you, most likely, are ALSO moderate. Some of the factors that can keep you (which really means, YOUR ENTIRE COMMUNITY) from getting preferred rates, are community’s rainfall, river flow data, topography, wind velocity, tidal surge, flood control measures, building development (existing and planned) and community maps.
The more active your local policians are, particularly, with community flood control measures, and building development requirements, the more likely your community will qualify for preferred risk.
Blame your local politicians, not your agent.