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Federal Flood Insurance Program Dried Up

Thanks to Congressional inaction (so what’s new), the federal flood insurance program has dried up.  Congress failed to extend the National Flood Insurance Program, so it expired Monday (March 1, 2010).

The National Flood Insurance Program is essentially the only place anyone can buy flood insurance. Almost every local insurance agent across the country uses the program to cover homeowners during a flood.  The program is normally renewed every year by Congress, but now right now the flood insurance program is tied up in the Senate as part of the same legislation that is being opposed by Republican Senator Jim Bunning of Kentucky.

Fortunately for the  Pensacola area, this is not the season we really worry about flooding. Once this issue gets worked out in the Senate, it is likely the flood insurance program will be back in effect. Fortunately for home buyers, this little Senate glitch is not likely to delay many real estate closings, and if so, only for a few days.

UPDATE – March 4, 2010: The U.S. Senate had reauthorized the National Flood Insurance Program after a legislative stalemate halted new policies and renewals on Sunday.  The Senate approved stopgap legislation late Tuesday night that extended funding for a host of programs, including jobless benefits and the flood insurance program.

Pensacola Real Estate News Related Articles:

Just Because You Are Not In A Flood Zone Doesn’t Mean You Don’t Need Flood Insurance

How To Determine The Cost Of Flood Insurance

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Allstate To Pay Fine and Settle Insurance Dispute With Florida

Allstate Insurance has a jaded record in Florida, and last week they decided to settle their disputes with the state.

For more about Allstate, check out the Pensacola Real Estate News article Think You’re In Good Hands? Think Again for more on Allstate’s treatment of its customers.

Florida Insurance Commissioner Kevin McCarty complained that Allstate failed to provide rate-related documents regulators had demanded, falsely claimed the material contained trade secrets and falsely certified a request to raise rates by more than 40 percent. Those complaints sound pretty serious to me.

As a result of McCarty’s complaints, Allstate has agreed to:

 

“It’s unfortunate that Allstate’s disregard for Florida’s laws required the office to take such drastic actions. However, I’m glad that we’ve reached this agreement,” McCarty said. “We’re looking forward to restoring the confidence of Allstate insurance companies.”

But wait, there’s more. Mr. McCarty has said that his office will continue to investigate Allstate for other possible violations of state law in claims handling and potential collusion with rating organizations, trade associations and other entities.

If these violations are substantiated the company could face fines, suspension or revocation of its licenses to do business in Florida.

Does this sound like a company you want to do business with? Do you really think you’re in “good hands”?

Check out the related web sites below for more information.

You’re In A Bully’s Hands With Allstate 

Consumer Affairs Allstate Complaints

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Think You’re In Good Hands? Think Again: Insurance Info from Pensacola Real Estate News

Homeowners insurance is a big expense in Pensacola Florida, and all along the gulf coast. Since the hurricane seasons of 2004 and 2005, insurance on real estate has risen dramatically, making it harder for people to afford to purchase homes.  I understand that Allstate Insurance has stopped writing homeowners insurance in the state of Florida, as have other large companies. While you may be able to go to an Allstate office to get a homeowners policy, it won’t be through Allstate.  It would be underwritten through another company, such as Citizens.

I recently came across a couple of posts regarding Allstate that I wanted to share with my Pensacola Real Estate news readers.

I was speaking with two attorneys recently and they were discussing insurance settlements. Both were in agreement that Allstate was the most difficult company to work with when it came to winning claims for their clients. Shortly thereafter, I came across a post by the Pensacola Beach Blogger regarding Allstate. If you are considering purchasing insurance, I highly recommend reading his article. You can find it at the link below.

You’re In A Bully’s Hands With Allstate

And if that is not enough to get you hot under the collar, here is another web page I found with consumer issues with Allstate.

Consumer Affairs Allstate Complaints

If you are moving to Pensacola Florida and will be needing insurance, contact a good real estate agent to help you find a great value on a home. Your agent should also be able to offer good advice on where to get quality affordable insurance coverage. At least after reading this article, you have an idea of which company you might want to avoid.

Click on Pensacola Real Estate News for a list of articles indexed by category.

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How To Determine The Cost Of Flood Insurance Coverage In Pensacola

House_In_Water

The National Flood Insurance Program has a web site from which you can determine if you live in a high risk flood zone, or if the property you are looking at is in a high risk flood area.

Given that Escambia and Santa Rosa counties tend to have a lot of low-lying areas, especially in the southern parts of these counties, it is critical that homeowners or buyers check the risk of floods to their homes. All you should need is the address of the property to find this approximate cost of flood insurance.

1. Go to the FEMA National Flood Insurance Program website.

2. Provide the property address. Once you access the web page, enter the property information in the available fields and then click the “Submit” button.

3. Wait for results.  After a few moments your results should be returned. I entered an address on Bayou Drive, which is in the Pensacola city limits, and borders Bayou Chico. The results returned indicated this property was in a high risk area.

I also entered addresses in areas that are high and dry with hardly any risk of flooding. These properties returned “Low to Moderate Risk” results. One address I entered is near the highest elevation in the city of Pensacola, on Creighton Road near Old Spanish Trail. I lived in this area for many years and never even saw a puddle form, much less any potential for flooding. Yet I was still given a Low to Moderate Risk result. My point is that your home will never be only “Low Risk” in their model.

4. Figure out the cost. After determining the level of risk for the subject property, you can scroll down the page and click on the link “Estimate Your Premium“. This will take you to a web page where you can put in the assessed risk and get a breakdown of the premiums you will pay in the given home. Note that the coverage premiums are based on structure and contents.

Here are some useful flood insurance links:

FEMA Information For Homeowners and Renters  

Flood Smart

Related Articles On Pensacola Real Estate News :  

Just Because Your Are Not In A Flood Zone Does Not Mean You Don’t Need Flood Insurance

Click on Pensacola Real Estate News for a list of articles indexed by category.

 

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Just Because You Are Not In A Flood Zone Doesn’t Mean You Don’t Need Flood Insurance

With the weather in the Pensacola area this week, I thought flood insurance would be an appropriate topic to discuss.

 On Oct 18, Pensacola airport reported over 6 inches of rain, and over 9 inches was reported in Gulf Breeze.

And there is still more rain to come.

Owning real estate in the Pensacola area, or on the gulf coast in general, means living with ridiculously high homeowners insurance rates. The typical homeowner would assume that their insurance policy would cover anything that caused damage to their home, including flooding. Given the cost of insurance in Pensacola, that would seem to be a valid assumption.

Unfortunately, many gulf coast home owners found to their dismay that this was not the case after hurricane Ivan hammered Pensacola in 2004. Owners of flooded homes were given the cold shoulder by their insurance carriers, and the courts stood by the insurance companies.

Here are some important points regarding flood insurance.

1)  Flooding is not typically covered under a homeowners insurance policy

Other losses caused by wind, fire, lightning, vandalism and burglary are covered. If you want to buy flood insurance, it must be obtained through the National Flood Insurance Program administered by FEMA. Your insurance carrier should be able to help you obtain flood insurance, although some insurance carriers have stopped providing this service.

2) Do Not Depend on Federal Disaster Assistance

To be eligible for federal disaster assistance, a community must be declared a federal disaster area. In most cases, flooding tends to be a localized event and a federal disaster declaration is not issued.

And IF disaster assistance is available, it is usually a loan you must repay, with interest.

After hurricane Ivan, the Pensacola area was declared a disaster area, and thus many homeowners without flood insurance were provided varying degrees of financial assistance. As an example, I knew a resident of a home in the Bayou Grove subdivision that was flooded with 3 feet of water when Bayou Chico rose from the Ivan storm surge. All of the owner’s possessions were destroyed, and the home had to be gutted. FEMA paid $10,000 to cover damage to the home and the contents. FEMA_Staging_Sign_Resize300Contractor estimates to repair the home were over $50,000.

3) Flooding can extend beyond flood zones

Approximately one third of all flood claims come from moderate to low risk areas outside of delineated flood zones. FEMA estimates that 1 in 4 homes in high risk areas will experience a flood over the course of a 30-year mortgage.

4) Flood insurance premiums are based on property location

In other words, if your home is in a flood zone, your premiums will be higher. To find out how much flood insurance will cost you, you need to know if you are in a low to moderate, or high risk flood area.  Refer to this article on How To Determine The Cost Of Flood Insurance in Pensacola.

It is extremely important to know whether a home you are living in, or one you are considering purchasing is in a flood zone. I have seen several instances where a contract was finalized for the sale of a home only to fall apart weeks later when it was found that the home was in a flood zone.

5)  Flood Insurance coverage

Comprehensive flood insurance coverage includes two policies.

The first covers the structure
The second covers the contents of the home.

When researching the cost of flood insurance, the policies will be broken down into these 2 categories.

The Pensacola News Journal wrote an article regarding Flooding in the Pensacola area after hurricane Ivan. This article provides useful information about flood insurance and some sad situations that could have been avoided by obtaining flood insurance coverage.  Fema_Trailers_Resize300

And if you do lose your home to a flood in Pensacola, there is a bright side. FEMA still has lots of trailers sitting out at the Saufley Field Naval Base just waiting for, well, waiting for something. They have been there since early 2005, so I’m not sure what they are waiting for.   (Update: As of April 2008, the FEMA trailers are gone).

Those trailers out there are empty. There were too many to count. If anyone can help me understand why they are sitting out there, I’d love to know.

Here are some useful flood insurance links:

FEMA Information For Homeowners and Renters  

Flood Smart

Click on Pensacola Real Estate News for a list of articles indexed by category.

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