When you pour your energy, time and heart into your business venture don’t let it fail, don’t let anything take it, you block your market competition in many ways but having the right protection although not as exciting as marketing is necessary to protect your asset.
In this article, we are going to explore the need to have commercial flood insurance and the many ways to control the cost of flood insurance for your commercial building.
How do I find out if I need to have flood insurance on my commercial building?
What the options for a flood insurance policy for a commercial building?
Is the private flood insurance market writing commercial flood insurance policies?
What is covered on a commercial flood insurance policy?
How much coverage can I get for flood insurance on my commercial building?
Commercial condominium flood insurance coverage.
Flood Insurance coverage for commercial loans.
Commercial flood insurance rates.
According to a 2018 study, led by the University of Bristol, far more are at risk of flooding than regulatory flood maps have determined.
This study estimates 41 million Americans are at risk from flooding rivers, which is more than three times the current estimate of 13 million people, based on regulatory flood maps.
Using high-resolution maps of the entire country (vs. the 60% utilized by FEMA), a greater focus on the potential flooding of rivers and streams, and more precise estimates of actual dwellings, this study predicts more than 60 million Americans may be vulnerable to a 100-year flood by 2050.
If you’re considering flood insurance for your business, there are many things to keep in mind.
It’s very rare for a business to sustain flood damage without operational interruptions or financial liabilities.
The sad fact is 77% of small businesses admit they are not prepared for a natural disaster… and floods are America’s #1 natural disaster.
Almost 40% of small businesses never reopen their doors following a disaster.
Your business could feature a floor full of displayed merchandise or be a small office with a few computers.
Just a few inches of water can cause tens of thousands of dollars in damage. Flood waters ranging from a few inches to several feet can ruin your business property and costly equipment, tarnishing your ability to fully service your clients and fulfill your business operations.
Commercial Flood Insurance helps to protect your business from the cost of flood water damage.
The first step is to check to see if your property insurance has coverage for the event of flooding but don’t be surprised if this is not covered many policies omit to cover “a flood” as a risk that they will cover. Most hazard insurance policies DO NOT cover flooding.
You see property insurance companies are not dumb, they know that you statistically have a higher risk of flooding then any other risk they do cover. Even in an area that is “considered” not a high-risk flood zone can flood and do flood.
Every year 20% of all flooding events across the nation are in areas that are considered low to moderate risk.
Flooding is the nation’s number one disaster and is a catastrophic event (meaning that it will affect many properties at one) as well as there is little preventive actions you can take that will protect your property is mother nature decides to open up the sky.
If you have a mortgage on a building you own then you will be required to purchase a commercial flood insurance policy. And if you have had the loan longer then 10 years you are well familiar with the cost of a commercial flood insurance policy. NOW would be a good idea to shop for a private commercial flood insurance option.
We can help.
How much does commercial flood insurance cost?
For those building that is in a higher-risk flood zone map (Zone V and A) the cost depend on the size of the building as well as the coverage amount.
The maximum amount of coverage available on a commercial flood policy through the NFIP is $500,000.
Some of the private flood commercial policies match this coverage limit some will go up as high as $14 Mill.
Buildings that are in low to moderate risk flood zones (Zone X) typically can get a much better premium on the NFIP Flood Insurance program because of the government subsidies these policies to date.
However, there are rumors and we have seen it in 2018 – the NFIP is planning on increasing premiums 20% annually until this premium matches the high-risk rates.
So if your premium keeps going up year over year, it might make sense to move to a commercial private flood insurance policy, we can help click here to begin.
COST of commercial flood insurance
Flood insurance premiums will take into account several factors
The age of the building
The location of the building to the risk
Location of the lowest flood in relation to the Base Flood Elevation (BFE)
The flood insurance Rate Maps for your area
Private commercial flood insurance is underwritten through Lloyds of London can double coverage and reduce premium drastically
Higher deductibles will also help control cost
We will shop all commercial flood insurance options for your property to ensure that we are getting you the best coverage at the best price.
Better Flood insurance offers Nationwide flood insurance
Better Flood Insurance writes across the nation and many of the insurance companies we shop have a Nationwide flood insurance offering.
You should know that there are many options for your flood insurance. Most of our peers don’t know about them because they tend to be a generalist, we are Flood Insurance Nerds and this is the only type of insurance we write, don’t you want an expert?
Many Lloyds of London Nationwide flood insurance offering.
Any given year there is flooding in the US and this is a Nationwide problem. Floods can occur anywhere in the country, below are some of the most common events that lead to flooding:
Storm surges in hurricane-prone areas.
Flash flooding, caused by intense rainfall.
Mudslides, caused by long, heavy rain periods on a hill or mountainside.
Snowmelt, caused by the still-frozen ground unable to absorb excess water.
Ice jams, when an ice chunk flowing in a river or stream blocks, dams or narrows passageways.
Urban development, such as new construction and or ground paving, which alters the flood waters by not allowing the land that might absorb excess flood waters.
What are your commercial Flood insurance options?
The National Flood Insurance Program (NFIP) has had a monopoly on the flood insurance market for more than a decade.
Most of the insurance companies you are familiar with Nationwide flood insurance, State Farm Flood insurance, Progressive flood insurance, for example, are operating under a federal program called the WYO that allow these companies to basically resell the NFIP or government option at no risk to them.
FEMA flood insurance coverage
It should be understood that when the NFIP was originally envisioned by Congress in 1968 as a way for the government to assist in coverage of properties that are in flood-prone areas since most private companies didn’t have the capital to handle a catastrophic nature of flooding.
Unfortunately, due to ill-considered nationalization of the flood insurance program, this allowed properties to be built in areas that are prone to flooding because uncle sam (AKA you as the taxpayer) will bail out these properties and we have had over 50 years of construction in these flood-prone areas.
Statistics extracted and extrapolated from FEMA statements and website: https://www.fema.gov/loss-dollars-paid-calendar-year.
As of January 2018, the NFIP’s total claims-paying ability stood at just $14.66 billion, including $9.9 billion in borrowing authority.
Private commercial flood insurance
We are most excited about what is going on within the commercial flood insurance offering within the private flood insurance companies thus making this a very attractive alternative to the NFIP flood insurance coverages.
The most notable being the significant savings we are seeing for commercial properties.
Many of the commercial flood insurance option we will shot simplify the administration of a stand-alone commercial flood insurance policy.
Key Benefits to Private commercial flood insurance.
One master policy covering all your properties instead of many individual NFIP policies.
Intern creating one renewal date rather than the scattering across many months as we have seen on the NFIP policies.
Replacement Cost Value (RCV) coverage instead of Actual Cash Value (ACV).
Option to include business interruption or loss of rents coverage this is new to flood insurance and then NFIP policy doesn’t offer this kind of coverage
Some of our options have no limitations on coverage for subgrade grade floors.
Most of our options are “A” domestic surplus lines carriers