Does my Rhode Island homeowner insurance cover flooding?
A typical Rhode Island 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.
Do I need flood insurance in Rhode Island?
It is important to have flood insurance coverage in Rhode Island 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 Rhode Island 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.
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?
One more note on these low-risk 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 Rhode Island, 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 Rhode Island 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 Rhode Island 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.
There are many options available in Rhode Island regarding flood insurance, but they basically fall into two main categories.
The government option also called the NFIP or FEMA and the Private flood insurance market
The National Flood Insurance Program (NFIP), also known as FEMA, which is the government option for flood insurance. The NFIP has enjoyed a 50-year monopoly on the flood insurance market.
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.
There 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 Rhode Island . 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.
Lloyds of London Flood Insurance Rhode Island Market
Rhode Island 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.
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.
My 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.
How much does flood insurance cost in Rhode Island?
There are many factors that go into getting the cost of flood insurance for Rhode Island. If your home is in what is considered low-to-moderate risk, you can get a heavily subsidized policy though the government.
Rhode Island 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):
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.
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 Rhode Island 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 Rhode Island with a basement foundation.
We will look at the Rhode Island 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 Rhode Island.
Cost of Flood Insurance in RHODE ISLAND in high-risk flood zone AE
Our example is in Narragansett, but the premiums will be the same if in Newport, South Kingstown, North Kingstown, Warwick, and many other Rhode Island flood ones.
In our example, the Base Flood Elevation (BFE is 11 ft) and is a home that is built before 1973
NFIP option in Rhode Island 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 $6,100.14
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
Rhode Island 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 $984.48 (great price)
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.
Rhode Island 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 $1,116.74
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 11 ft, if the lowest floor is 7 ft, 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.
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 $2,625.27
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
The annual premium in High-Risk flood zone is $845.20 (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.
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 $1,345.16
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.
Private Flood insurance – Lloyds of London (option 6)
Coverage of $250,000 (RCV) building coverage. No Contents and $5,000 deductible.
Annual premium in High-Risk flood zone is $1,404.79
This options rating system is also all over the board. Sometimes we get a crazy low price; other times the premium is way higher than the NFIP. They 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 $25,000 on the claim. They have been rumored to give a low price the first year and then non renew following years or sometimes they jack the price way up so we will watch them. They have a slick system, and their underwriting is managed by a 3rd party, which also seems to be a glitch sometimes.
There are more options coming online every day, and we are working to be looking into every viable option.
Currently, Rhode Island has 12,252 NFIP policies in force to date with the total cost of $18,409,898. That would make the average flood rate for Rhode Island $1,289. Of course, some will pay more, and some will pay less.
In Warwick, Rhode Island, the average flood rate is $1,278. The premiums here total $1,811,750 with 1,418 flood policies in effect.
Let’s check out a group of areas including West Warrick, Jamestown, and Little Compton, Rhode Island where the premiums total $629,451. The active flood policies here add up to 524 which allows the average flood rate to be $1,201.
Middletown, Rhode Island has 111 flood policies in effect with $160,518 in written premium. The average flood rate in Middletown is $1,446.
When we look at Newport, Rhode Island, we find an average flood rate of $1,687. The premiums in Newport total $1,821,797 with 1,080 in total active policies. Give us a call Newport!
The average flood rate rises to $1,850 in Portsmouth, Rhode Island. Portsmouth has 602 flood policies in effect with $1,113,701 in flood premiums.
Looking at Tiverton, Rhode Island we find an average flood rate of $1,589. The active policies total 156 with $247,892 in written premium.
When we check out Cranston, Rhode Island, we see the average flood rate drops to $1,245. The premiums total $528,061 with 424 flood policies in effect.
Let’s check out East Providence and Lincoln, Rhode Island, where the average flood rate drops again to $668. The policies total 475 with $317,102 in total premiums.
Providence, Rhode Island has 586 active flood policies with $605,334 in written premiums. The average flood rate in Providence is $1,033.
In Smithfield and Woonsocket, Rhode Island, the active policies total 313 with $178,459 in total flood premium. The average flood rate for Woonsocket and Smithfield is $570.
$1,580 is the average flood rate in Charlestown, Rhode Island. The premiums here total $1,077,553 with 682 flood policies in effect.
1,434 policies are active Narragansett, Rhode Island, which is the highest in the state. Narragansett has $1,695,015 in total premiums which all the average flood rate to be $1,182.
The average flood rate for North Kingstown, Rhode Island is $1,547. The premiums here total $1,151,043 with 744 active flood policies.
Next, we’ll look at South Kingstown, Rhode Island where there are 820 flood policies in effect with $1,389,023 in premiums. The average flood rate for South Kingstown is $1,694.
Finally, let’s check out Westerly, Rhode Island where the average flood rate is $2,427. Westerly has 893 flood policies active with $2,167,600 in premiums. Give us a call Westerly!
Thanks for checking out all the flood information on Rhode Island!!
Rhode Island V and VE flood zones
V and VE flood zones with the NFIP can be extremely expensive. We have seen premium that are $34,000 a year for a single home family. This is ridiculous!!
We suggest that you let us shop your V or VE flood zones on to the private flood Market that is underwritten by Lloyds of London.
We have been able to double even triple coverage for ocean front properties.
The main issue that we see with beachfront properties is that on the NFIP they have a one-size-fits-all solution and many properties are paying over what we consider is a fair premium for waterfront houses.
How to save money on Flood Insurance in RI VE flood zones
All homes that are ocean facing are custom built so with this special consideration our Lloyds of London VE flood zone and other Private Flood Insurance options for oceanfront properties take this into consideration with variable coverage options as well as significant savings below is a case study for a property we were shopping just last week.
Our example was in the Narragansett, RI area and is in a VE flood zone map.
For the coverage of $250,000 with no contents and a $5,000 deductible the NFIP annual cost for flood insurance in a VE flood zone is $32,8958.00. Ouch!
Since we are who we are and experts in Flood Insurance we will look at every property everyway possible to ensure that we are getting the best premium for our clients and WE often Do (smile wink)
We tried this same property on our Private flood options and were able to get the premium to under $2,500 and we have in some cases with similar properties gotten the annual premium to $1100 this was a feather in our cap and made our clients very happy. Again all properties are unique in these VE flood zones but if we can find a private flood policy for you we guarantee it will be better then the NFIP option.
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.
the following documents contain additional hydrologic data, flood photos, historic flood descriptions, floodplain delineations and other pertinent information, and should be considered supplemental to this flood warning plan: