Back to the Business of Flood and Home insurance in New York and New Jersey

Welcome back to our Blog. It’s been a good while since I have posted, but I’m back and there will be more good information here on home, flood, and auto insurance for the New York and New Jersey marketplace.

The insurance market is changing very fast these days. Especially when it comes to flood insurance and excess flood. There is now a new kid on the block, known as Private Market Flood insurance. What that means is that the coverage is NOT written and backed by FEMA or the National Flood Insurance Program (NFIP). It is written by private insurance companies, mostly Lloyd’s of London. It generally gives the same exact coverage as FEMA flood policies at a lower rate.

But not everybody qualifies, it’s on a case-by-case basis. Each property has to be checked according to the company’s maps and other qualifications. And the overall problem with flood insurance is that FEMA is paying out about $4 for every $1 it takes in, so they are losing money all the time. It’s hard for a local agent like us to figure out how Lloyd’s will make money when FEMA is losing their proverbial shirts, but they think they have it figured out. It will be interesting to see if these policies are still available if we have a couple of years of bad storms.

Meanwhile, FEMA’s program continues to have rate increases and get more and more complicated. A few years back there changes to the Flood Insurance Rate Maps for a lot of the New York/Long Island/New Jersey coast. At that time, there were some homes moved IN to flood hazard zones, and many who were moved OUT.

But the responsibility for making sure the corrections were made was left to the AGENT! So we have seen many FEMA / NFIP flood insurance policies with huge mistakes in the rating. Plus a lot of people are neglecting to fill out forms for their renewal policies. These forms confirm that this house is your primary residence. If it’s a seasonal, secondary, vacation, or rental property, there is a $250 surcharge. If it’s your primary residence, the surcharge is only $25 so there is a $225 difference, with many people paying too much.

We will be posting more often so keep us in your sights. Next up – IS CAR INSURANCE GOING AWAY?  And as always, for more information or to contact us, visit us at


Hi all. It’s been a while but i have a few items to post about. This is the most important one. No matter where you live in the country, residency requirements are about to change BIG TIME for homeowners insurance. The new language says you MUST be living at the residence premises at the time the policy starts and each year when it renews.

There are many problems with this, but let’s just pick a few. What about snowbirds? What if you go into the hospital and then to a rehab center for 3 months? what if you just bought the house and want to do some work on it for a few weeks before moving in? what if you head for North Carolina and let one of your kids live in the house?

Anyway, this is going to be a HUGE issue so if you think you may have any such risk, be sure to talk with your agent. There is a partial solution in the form of a paper you can file with the insurance company advising them of the dates you won’t be there. But first of all, who thinks of that? and second, THE FIX HAS NOT YET BEEN APPROVED IN NEW YORK. But the basic language that causes the problem HAS been approved and will be taking effect at some point for most insurance carriers.


09These days our office is fielding more and more calls from people on Long Island and elsewhere who have gotten big increases in their flood insurance rates. In most cases, the increases are NOT correct, but many insurance agents and brokers who don’t write that much flood insurance are also not sure why the rate went up in each case, and then not sure what to do to correct it.

The short version of the story is that back in 2012, a few months before Sandy hit Long Island, New Jersey, and Connecticut and did a huge amount of flood damage, congress passed a change to the National Flood Insurance Program called the Biggert-Waters Act. The basic problem is that the FEMA flood insurance program is losing large amounts of money, and only collecting about 25% of what they pay out in claims. Biggert-Waters made many changes but most especially called for large rate increases on homes built before the National Flood Insurance Program went into effect. The increases would only take effect when the homes were sold, or if the home was not the primary residence of the owner (in other words, a seasonal or vacation home, or a rental property). There were many other changes as well.

After the dust settled from Sandy and the real estate agents groups found out what the Biggert-Waters Act was doing to the resale values of older homes, they called forth the lobbyists who eventually worked out the Flood Insurance Affordability Act which took effect in May of this year. This basically undid most (though not all) of the changes that were contained in Biggert-Waters.

However, the companies that service the National Flood Insurance Program on behalf of FEMA and the federal government were not able to make all the changes needed to their computer systems to undo the Biggert-Waters changes which had only  taken effect a year or so earlier. So many Long Island flood insurance policies are coming in with much higher rates that WOULD HAVE been correct under Biggert Waters. Theoretically the insurance companies are supposed to make the corrections, but practically speaking, for now it’s up to the insured to question the increase, and his or her agent or broker should be able to help get it corrected.

Making Sense of Flood Insurance in the Current Long Island Housing Market

Welcome back after a long year post Sandy. Our office has been very busy handing wind and flood claims under FEMA flood policies, Lloyd’s of London specialty flood coverage and excess flood policies, and our various homeowner customers. And since we cover a big area, we have been working on losses in New York and New Jersey as well.  We in the office are proud of the work we have done.

Now comes another matter. What is going to happen to coastal and waterfront property values, with everything that has happened? Homes have been destroyed, neighborhoods decimated, and there are still a lot of people who have yet to even get back in! Now the questions come. Should we raise our house? What is flood insurance going to cost going forward? And how about homeowner’s insurance, which is where wind damage is covered?

The large insurers continue to cancel and non-renew properties they consider too close to the water. But the water is not what they are afraid of. It’s those lovely bay and sea breezes everyone talks about as one of the reasons they live by the water. Go a little ways inland, and the buildings and houses start slowing up the winds fairly quickly. In fact, hurricanes generally can’t survive long over land because they need to suck up their water supply from the ocean and their wind power from the strong currents over open waters.

As far as flood insurance, the answer is pretty complicated. And a lot of it is on a house-by-house basis. So you can no longer call us up with an address and get a fast flood insurance quote that is firm. A flood insurance elevation certification will be required with most sales in order to find out what flood insurance will really cost going forward.

The problem is that these certifications, which must be done by a licensed engineer or surveyor, can cost from $400-1000. If you are a buyer, and you want to look at a variety of homes in this market where plenty are available to look at, you would have to ask for a copy of the certificate from the seller, or pay to have one done yourself.

To me it would make much more sense if I were selling, to have a flood insurance elevation certificate done and offer a copy to any prospective buyer. I think right now that would give you a good leg up in making for a smoother sale. Once a prospective buyer has that certification in their hands, they can ask their insurance agent of choice to get them a firm quote or advise if anything needs to be done to get the best rate.

Flood insurance has gotten a lot more complicated. Make sure you get the right information or it could be very costly in the future, and i mean 3-4 years, not decades. There are homes which, if not raised, will find themselves paying almost $10,000 in the next few years for flood insurance. But DON’T PANIC, those are relatively few, and will have had multiple flood losses already, and so the point FEMA is making is, raise it or don’t expect us to keep paying you over and over for it.