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Important Update & Positive Changes on Flood Insurance
McMahon Insurance Agency serving Cape May County and surrounding areas 609-399-0060
By Michael McMahon
In Cape May County and beyond, the Flood Insurance market is expanding and that is good news for consumers! Historically, the only option available to homeowners to insure against the risk of flooding was through the National Flood Insurance Program (NFIP), a federal program administered by FEMA through private insurance companies. Today, there are a number of private insurance carriers offering private market alternatives that offer better coverage than provided by the NFIP at a competitive price.
Since 2012 there have been a number of changes to the NFIP which caused confusion and concern for owners of coastal properties throughout the country. In Cape May County, we were impacted by issues from the implementation of congressionally mandated changes to the NFIP from the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowners Flood Insurance Affordability Act. Additionally, new Flood Insurance Rate Maps that are used for rating of Flood Insurance policies were adopted for Cape May County in October of 2017. For the most part, these changes have been implemented and continue to drive the premium increases in the NFIP for most properties at about 10% per year.
The Biggert-Waters Flood Insurance Reform Act of 2012 included a provision to encourage the development of the private market Flood Insurance alternatives to the NFIP and the insurance industry has responded in a very positive way. Five years ago, we had one private market alternative to offer clients, today we have five with more options on the horizon. There is even a Homeowners policy available that has a flood insurance endorsement that gives owners the full limits of their Homeowners policy, with one deductible.
The most exciting developments in this burgeoning market for McMahon Insurance Agency is the ability to give customers coverage for exposures that have never been an option with the NFIP with very competitive premiums. Coverages like…
- Replacement cost of building (only available for primary homes & condominiums in NFIP)
- Replacement cost on contents (not available in NFIP)
- Coverage for other structures (only get up to $25,000 on detached garage in NFIP)
- Loss of Use/additional living expense (not available in NFIP- have to file for disaster aid)
- Pool repair & refill (not available in NFIP)
- Shorter waiting periods
In addition to the evolution in the Flood Insurance market, the options available to consumers for their Property Insurance needs is also seeing expanding options with more admitted carriers writing Coastal Property Insurance. We have a number of admitted carriers offering coverage that a few years ago only had excess & surplus lines carriers like Lloyd’s of London available. Coverage for personal and commercial rental properties, single family homes and condominiums are all options we can provide.
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.
• MichaelM@McMahonAgency.com
• AngelaW@McMahonAgency.com
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