Call: 203-637-6655  or email – Kyle Shepard

Bench Being Flooded During a Storm

Flood Insurance

The Need is Obvious, the Cost Not So Certain

In the aftermath of Elsa, Fred, Henri and then Ida the need for Flood Insurance has become an important topic. To be clear all flood insurance is issued by NFIP, the National Flood Insurance Program, or 3rd party insurers like Wright National Flood Insurance Company but fall under the domain of FEMA (Federal Emergency Management Agency). The NFIP is largely insolvent needing an annual bailout from the Federal Government.

“the massive storms from the summer of 2021 can only be a bell weather for future flood insurance costs.”

Where is this going?

You might call this the great unknown. The 2.0 program from NFIP began in October 2021 with rates for new purchases that are significantly more than policies being renewed for current owners.

We recently were involved with a new purchase for a client where we assisted the buyer with taking over the previous owners’ existing Flood policy which had a rate of $1,500. Without that option, the 2.0 rate for our client for $250,000 of building and $100,000 of contents would have been 7,900. This was the best solution as the flood policy was a requirement from the mortgage company.

There is some protection for current owners in that premium increases are limited to 18% per year. But for the new buyer, especially the new buyer with a mortgage, identifying that the previous owner has Flood coverage that can be assumed by the new buyer, is the only manageable way to control costs.

The massive storms from the summer of 2021 can only be a bell weather for future flood insurance costs. Buying coastal is going to require more organization and deeper pockets.

Inside water damage versus outside damage should prompt you to contact your insurance agent to be fully versed on your exposure, if you will be covered, and then coverage options if you are not.

If you have questions on Flood insurance contact Kyle at kshepard@shepardinsgrp.com or call 203.698.9342.


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