Montana Flood Insurance

Flood Insurance Montana

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Does my Montana homeowner insurance cover flooding?

A typical Montana homeowners’ policy is written through Farmers, State Farm, Allstate, and Progressive, for instance, excludes flooding as something that will be covered under their homeowner’s policy.

In most cases, the only way to get flood coverage is by purchasing a stand-alone flood insurance policy. However, you should ask your homeowners agent if you can add an endorsement to your homeowner’s policy to cover flooding. Yet, don’t be too surprised if the answer is NO.

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Do I need flood insurance in Montana?

It is important to have flood insurance coverage in Montana because our beloved Cowboy State has seen a fair share of flooding, and there is likely more coming.

We believe that most homeowners think about Flood insurance in Montana at some point, maybe before buying a home, or during the closing process.  However, many of us only think about it when a big storm is looming, or we have heard on the news that there is flooding forecasted or happening currently too close to our home.

If your home or business is in a flood zone, that is considered low flood risk area. Sadly, many homeowners decide to forgo purchasing coverage because they believe they are safe from flooding. Some real estate agents and some insurance agents may even say you don’t need it.

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I ask you to consider the facts: 20-percent of all flooding events across our nation come in areas that are considered low risk.

After our last few major storms (Hurricane Harvey), we saw flooding in these low-risk areas.  In 80 percent of these individuals, they had water in their home or building and didn’t have flood insurance coverage.

In Harris county, nearly 135,000 homes were damaged.  Three-fourths of these properties were considered low to moderate risk.

We hear often that people believe that the government will help, and this is true.  However, there are a few things that must align for you to get government assistance.

1 – The president of the United States must declare the flooding event a state of emergency.  If this doesn’t happen, then there won’t be assistance.

2 – The average amount of assistance that homeowners get after a flood, when they do not have flood coverage, is $5,000.  The average cost of damage to one’s property after a flood is $38,000+.  That $5K you get from the government?  It comes in the form of a loan and you will need to pay it back.  Are you willing to gamble away your financial future by forgoing flood insurance coverage?

https://www.bloomberg.com/graphics/2017-fema-faulty-flood-maps/

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One more note on these low-risk Montana flood zone maps. Many of these maps are over 40-years old. If the area has been developed, then there is likely more concrete, creating a barrier for land that previously, might have absorbed the massive downpour.

Because of all these factors, it is difficult for property owners to know their true risk of flooding. FEMA admits that their flood maps only give an idea for part of the risk. Our recent storms are facts that it can rain anywhere within Montana, and you should consider getting flood coverage, so you are not uninsured when you need it most.

FEMA flood zone maps often take years to go into effect after the terrain was studied, this gives the impression that the area is “more up to date” then it really is.

The average cost for Montana flood insurance in these Low-risk areas is $595 per year.

FEMA’s National Flood Insurance Program (NFIP) and all federally backed lenders rely on these Montana flood insurance maps to assess risk, set premiums, and determine who is required to purchase flood insurance. Bad information about an areas flood risk can leave property owners under or uninsured.

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How much is flood insurance in Montana?

Montana NFIP flood insurance.

There are many options available in Montana regarding flood insurance, but they basically fall into two main categories.

1 – The National Flood Insurance Program (NFIP), also known as FEMA, which is the government option for flood insurance.  The NFIP has enjoyed a 50-state monopoly on the flood insurance market.

2 – Not “private flood insurance” but NFIP Resellers

If you have Nationwide Flood Insurance, State Farm Flood Insurance, Progressive Flood Insurance, or any of the of the logos below then you are buying the NFIP flood policy that is just being resold through a government program. These companies are private companies, but their flood insurance is not. Here is a list of the 70 companies that resell the NFIP policy.

Progressive Flood Insurancehttps://www.fema.gov/wyo_company

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Montana private flood insurance market

 

Llloyds of London Flood Insurance ShopperThere are alternatives to the NFIP or government insurance.  It  is called Private flood insurance most notably Lloyds of London Flood insurance, however, there are other options available in Montana. We shop all the options for your property in your region to ensure you are getting the best premium.  If you are ready to have us do the work for you, please click here.

Our shopping does include the NFIP because sometimes we find that with government subsidies you can get a much better premium.

https://www.betterflood.com/quote/

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Lloyds of London Flood Insurance Montana Market

Montana is fortunate to have many Lloyds of London flood insurance options. Although many Lloyds flood insurance companies will have you assume that there is only one option, nothing could be further from the truth.

Lloyds of London has a rich history and is attributed to have invented the very first modern insurance model. Unlike most of its competition, Lloyds of London is not really a company but rather a corporate body.  This structure works quite well since it has been around for over 330 years. Lloyds operates under multiple financial backers that all pool their capital to spread the risk.

I have two blog posts that take a deep dive into Lloyds of London and what they mean to Montana’s flood insurance market.  Iif you are interested, the links are below.

Lloyds of London Flood Insurance

FEMA vs NFIP vs Private Flood Insurance Market

Lloyds also insures the world for flood insurance, meaning they cover flooding events in India, Australia as well as much of Europe.  You see the “game” of insurance is to spread your risk since Lloyds is worldwide.

Lloyds of London Private Market Flood InsruanceMy joke here is that Lloyds is banking on Gods promise that he won’t flood the entire world again, …..so they won’t have to pay out the whole worlds flood claim.

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How much does flood insurance cost in Montana?

There are many factors that go into getting the cost of flood insurance for Montana. If your home is in what is considered low-to-moderate risk, you can get a heavily subsidized policy though the government.

Montana flood insurance low-to Moderate Risk rate and cost.
This is Flood Zone X, which is not lender required flood zone.

This is usually identified as an X-flood zone.  Then we would suggest the government Preferred Risk Policy (PRP) which is a subsidized policy and has set flood insurance coverage limits (see grid below):

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Here a link if you want to really dig into this one. Be ready for an eye chart because every option is public record and should be standardized accost whoever writes these policies.

The average cost for flood insurance in Montana with the maximum set limits in these Low-risk flood zone areas is $405 – $700 per year.

https://www.fema.gov/media-library-data/1523307331106-4cf9726b2eb04c3471a3e9d37a58fa6a/09_prp_508_apr2018.pdf

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A flood zone and SHFA rate maps
FEMA High-risk Rates

If your property is in higher-risk flood zone, it is usually identified with a Flood Zone AE. Your lender will require you to have flood insurance. The cost of flood insurance in Montana depends on many factors that are unique to the structure.

We are going to try to give you an idea for the most common homes we see in Montana with a basement foundation.

We will look at the Montana cost of flood insurance for the NFIP maximum of $250,000 for the (building only) with NO CONTENTS and our recommended deductible of $5,000.

We will be rating this example on the NFIP, as well as on a few of our private flood insurance policies, specifically Lloyds flood insurance options in Montana.

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Cost of Flood Insurance in MONTANA in high-risk flood zone AE

Our example is in Great Falls Montana, but the premiums will be the same if in Kalispell, Anaconda, Lamar, Flathead County, and many other Montana flood zones.

In our example, the Base Flood Elevation (BFE is 3323) and is a home that is built before 1969

NFIP option in Montana Flood Zone AE

NFIP – Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

NFIP Annual premium in High-Risk flood zone is $3,247.00

This option is what we see if the property has had a flood loss before, and either doesn’t have an Elevation Certificate applied or the Elevation certificate showing that the lowest floor is 4 feet under the BFE for the area. You can use 10% of your coverage to cover other structures on your property

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Montana Private flood insurance – Lloyds of London Flood Insurance (option 1)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Lloyds of London (option 1) Annual premium in High-Risk flood zone is $1047.09

This option is great, and we are very happy when we can get this option. They can be a bit choosey about what risk they will accept and will not take anything that has had a flood loss. They do offer coverage for basements, about $2,000 for loss of use, $2,000 for other structures, but they can’t increase this coverage. They do not require an Elevation Certificate to rate.

Montana Private flood insurance – Lloyds of London Flood Insurance (option 2)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Lloyds of London (option 2)  Annual premium in High-Risk flood zone is $1,229.06

This option is great, and we are very happy when we can get this option for our clients as well. They seem to be writing almost all risks; however, they do not write any property that is in a designated floodway or has the depth of -4 under the BFE.  In our example, with our BFE being 5368, if the lowest floor is 5364, then they will not accept this risk.  They will not take anything that has had a flood loss. They do offer limited coverage for basements and do not require an Elevation Certificate to rate, and as a percentage of coverage for loss of use. If you want coverage for other structures, then that will need to be added.

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Private Flood insurance option (option 3) Not Lloyds

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Annual premium in High-Risk flood zone is $2923.00

This option will take properties that have had one flood loss as long as it has been more than five years, and the payout was under $100,000 on the claim. Their coverage matches the NFIP.  They will write practically all risks, don’t need an elevation certificate to rate, and are a bit lower in premium than the NFIP.

Private Flood insurance –  Lloyds of London (option 4)

This option must be written on the Replacement Cost Value (RCV) of the building, otherwise, there is a co-insurance penalty that kicks in. So, $250,000 might be a bit low in California, but to keep this going, let’s just use that for this option

Coverage of $250,000 (RCV) building coverage, No Contents and $5,000 deductible

Annual premium in High-Risk flood zone is $649.50 (great price).

This options rating system is all over the board.  Sometimes we get a crazy great price, but other times the premium is way higher than the NFIP will consider taking a property that has had one flood loss before as long as it has been more than ten years and the payout was under $50,000 on the claim. Their preferred coverage is at replacement cost, which is a bit different from some of our other Lloyd’s flood options.  We usually reserve this one if the property doesn’t fit into any of our options above. We can adjust coverages to control premium. As mentioned before, this underwriters’ rates are all over the board.  It is worth shopping through to make sure we are getting you the best premium we can. They don’t need an elevation certificate to rate.

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Private Flood insurance –  Lloyds of London (option 5)

Coverage of $250,000 (RCV) building coverage, No Contents and $5,000 deductible.

Annual premium in High-Risk flood zone is $1,115.32

This option came out of the company that used to run the NFIP program, so the coverage almost exactly matches the NFIP coverage with two differences. They offer living expenses which will cover your cost, when you are displaced from your home during repairs (most Lloyds flood policies offer this).  They also offer swimming pool clean out, which is kind of unique so if you have a pool ask for this coverage.

There are more options coming online every day, and we are working to be looking into every viable option.

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Currently, Montana has 5,225 NFIP policies in force to date with the total cost of $3,679,000. That would make the average for Montana $704. Of course, some will pay more, and some will pay less.

Flood Insurance Montana

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Hello, Montana!  Thanks for visiting our page for all your flood insurance needs.  Looking at Dillon, Big Horn, and Blaine, Montana – you all have 811 active flood policies.  The average flood rate for these areas is $811.  This includes $49,469 in written premiums.

110 flood policies are in effect in Carbon, Red Lodge, and Belt, Montana.  This includes $95,187 in written premiums which causes the average flood rate to be $865 for this area.

Cascade, Montana, thanks for stopping by!  The average flood rate for Cascade is $901.  The premiums total up to $272,148 which includes 302 active flood policies.

Flood Insurance Agents in Great Falls Montana

There are 254 active flood policies in Great Falls, Montana.  The total amount of written premium is $128,829 which causes the average flood rate for Great Falls to be $507.

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Flood Insurance Kalispell Montana

Flood Insurance Kalispell Montana, you have 42 active flood policies!  You all have $37,580 in written premiums.  This allows the average flood rate in Kalispell, Montana to be $895.

$661 is the average flood rate for Fort Benton and Custer, Montana.  This includes 52 active flood policies and a total of $34,400 in written premiums.

Miles City, Montana, you have the most active flood policies in your state – 980!  The premiums written here total $550,009 which causes the average flood rate in Miles City to be $561.

FLOOD MAPS FOR INSURANCE ANACONDA MONTANA

$34,745 is the total for written premiums in Anaconda-Deer, Lewistown, and Columbia Falls, Montana.  The active policies for this area are 66, which causes the average flood rate to be $526.

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Flood Insurance in Flathead County Montana

Flathead, you come in second in the state with 567 active flood policies!  You all have $406,425 in written premiums.  This allows the average flood rate in Flathead, Montana to be $717.

In Whitefish and Bozeman, Montana, there are 255 active flood policies.  This causes the average flood rate to be $435 which includes $110,988 in written premiums.

Three Forks and Gallatin, Montana has one less active policy than above!  They come in at 254 active policies with $166,545 in written premium.  The average flood rate for Three Forks and Gallatin computes to be $656.

The average flood rate jumps to $1,280 in the following areas: Jordan, Browning, Havre, and Hill, Montana.  This rate includes 62 active flood policies in these areas along with $79,363 in written premiums.

The rate drops a little to $732 for Lake County and East Helena, Montana.  The premium written here is $58,570 which includes 80 active flood policies.

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Hello Lewis and Clark, Montana!  Thanks for stopping by!  Your average flood rate is $696.  This includes 228 active policies and $158,141 in written premiums.

$808 is the average flood rate for Lincoln and Madison, Montana.  In this area, there are 119 active flood policies with $96,116 in written premiums.

Meagher and Mineral, Montana, you all have 37 active flood policies.  The average flood rate for your area is $1,148.  This includes $42,475 in written premiums.

376 is the number of active policies in Missoula, Montana!  The premium written in Missoula is $283,774 which causes the average flood rate to be $755.

Mussellshell, Malta, and Phillips, Montana has 48 active flood policies.  This allows your average flood rate to be $570 which is lower than the state average.  In these areas, the total written premium is $27,375.

$164,810 is written in flood premiums in Livingston, Park, Broadus, Deer Lodge, and Powell, Montana.  The average flood rate for these areas is $891 which includes 185 active flood policies.

Thanks for stopping by Ravalli, Montana!  You all have 161 active flood policies.  This includes $109,396 in written premiums.  Your average flood rate is $679.

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In Richland, Fort Peck Indian, Forsyth, and Rosebud, Montana, there are 45 active flood policies.  The average rate for this area is $1,087.  The written premium totals $48,936.

Hello Sanders, Butte-Silver Bow, and Stillwater!  So glad to have you here!  Your average flood rate is $708.  There are 130 active policies with $92,013 in written premium in your areas.

$807 is the average flood rate for Sweet Grass, Choteau, and Teton, Montana.  This includes $68,566 in premiums with 85 active flood policies.

Valley, Montana, your rate is higher than the state average at $1,054!  Maybe we can help you save some money!  This average includes $65,372 in written premiums and 62 active policies.

The average rate drops quite a bit from Valley when we swing over to Billings and Yellowstone.  Their average flood rate is $638.  In Billings and Yellowstone, Montana, there are 362 active flood policies and $230,806 in written premiums.  Thanks for checking out all of the flood information on Montana!!

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Montana Flood Insurance Cost Calculator

For decades, the NFIP has over-charged 50 percent of its policyholders and under-charged the other 50 percent, while it has racked up $42 billion in taxpayer-funded losses, equating to more than half of every claim paid by the NFIP since 1978.

About 30 percent of NFIP claims payments go to the same 3 percent of insured “repetitive loss” structures year after year. When you do the math, this means that the other 97 percent of their flood-exposed constituents could have paid in less and still netted larger claims payouts if they had better access to private flood insurance. In fact, a recent white paper by Milliman found that 90 percent of homes in Sandy-struck New York and New Jersey would see reduced flood insurance rates through private insurers.



ROBERT MURPHY
Robert Murphy is the Founder of Better Flood Insurance a nationwide Flood Insurance Agency. He is a flood nerd, is passionate about education around the need for Flood Insurance.
We shop all options to make sure we are getting our clients the best coverage at the best price.

 




Resources

https://bsa.nfipstat.fema.gov/reports/1011.htm#COT
https://www.fema.gov/average-claim-payments-date-loss
https://www.fema.gov/national-flood-insurance-program
https://www.fema.gov/media-library-data/1486576697135-ac6348fb2a3d98ceba33cf3f38422dbc/Claim_Loss_Counts_Sept2016.pdf
https://www.fema.gov/media-library-data/1458666638945-d752cb148ef1348b4b1c22acec66a0bd/Claim_loss_count2015.pdf
https://www.fema.gov/media-library-data/1393877884619-3091f75bf9d46a26f5beb7d423c34529/Total_Claim_Count_fy2013.pdf
https://www.weather.gov/safety/flood-states-mt