Hugh Merkle Team - COMPASS RE

Coastal Insurance Market Update 2022

Posted February 1st 2022

Property owners along the New Jersey coast quickly learn the importance of flood insurance. For years the only option for available to consumers was the National Flood Insurance Program (NFIP). Because it is a federally backed program, the coverage is very limited. The maximum coverage the NFIP offers on a single family home is $250,000. For condominiums, the limit is $250,000 per unit in the building, and $500,000 for a commercial building. New construction on the coast often costs 3 times the limit for single family homes. The good news for consumers is the insurance industry, in recent years, has rolled out private flood insurance products that offer the higher limits and enhanced coverage that homeowners really need to adequately insure their properties.

We have two carriers who have a flood endorsement available on their Homeowners policy. They will insure your house and add the flood coverage, all on one policy! Talk about bundling! This product is also available for 2-unit condominiums. The key benefits over the NFIP are full replacement limit of the house, coverage for detached structures on the property, one deductible and one adjuster if we have a storm that causes wind and flood damage.

Another product we are able to offer provides a limit of $10,000 for pool repair and refilling. If there is flooding that doesn’t cause damage to the house but the pool got flooded out and needs to be drained and refilled, this coverage would cover these costs.

We have other carriers that offer a similar policy to the NFIP policy with higher limits and better coverages such as replacement cost up to the building limit, replacement costs on contents and loss of use. This option is available to homeowners, condominiums and commercial structures. The bottom line is today the coastal homeowners have options for their flood coverage.

Of course not every building will qualify. The carriers usually want the structures that are elevated and haven’t had flood claims. One downside with the private market is a carrier can go sour on the flood product and non-renew the policies. Similar to Homeowners insurance companies writing on the coast, carriers come and go from the marketplace.

Today with flood insurance, consumers have more options than ever before and we are happy to discuss them with you. Our goal is to help inform and educate consumers about Flood and Coastal Property Insurance. Even if you are not a client of the McMahon Insurance Agency, we would be happy to answer your questions. If you have specific questions about your home or one that you are considering purchasing, feel free to contact myself or the team at the McMahon Insurance Agency at 609-399-0060.

The Hugh Merkle Team - COMPASS Office: 609-368-9100
374 96th Street, Stone Harbor
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