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Ask the Expert: David Mathes on Flood Insurance

This week, I had the chance to sit down with David Mathes, Principal of Mathes Insurance Agency, and ask him about flood insurance coverage and who should buy it. David and his firm specialize in home, auto, and business insurance. Read on to hear what he has to say...

  • With the recent flooding due to hurricanes Harvey and Irma, there has been a lot of reporting on the news about flood insurance, but some reports have been incorrect. Can you please clarify some of the major misconceptions that have been reported? Yes, there have been a lot of reports regarding flood insurance coverage and not all have been accurate. I think the biggest misconception people have is that flood insurance is very expensive. In most cases, the maximum annual premium for a home is $499. The second thing that is a bit misleading is when officials say the property is not in a flood zone. Every property in the United States is in an official flood zone and at risk for flooding.

  • We have heard of the incredible amounts of damage caused by these recent storms. What kind of flooding damage does a normal homeowner's policy cover? Home insurance does not cover flood damage. However, we need to understand the terminology when we are talking about flooding. Flooding from an insurance perspective is flooding from ground water. Flooding events can occur from rising tides, storm surge, flash flooding, seeping of water from basements or foundations and even accumulation of rainwater. If a pipe burst in the home or if a tree limb falls on the roof and causes rainwater to “flood” the home, that would be covered under home insurance and is not considered flooding.

  • You said all properties are in a flood zone. But aren’t there different levels of risk for flooding? How can you determine the level of flood risk on your property? It’s true that every property in the United States is in a flood zone, but there are “high risk” flood zones and “preferred risk” flood zones. As agents, we have access to the FEMA database of flood zones and can run a flood zone determination report. However, keep in mind that over half of all flood-damaged homes have never flooded before and are in preferred risk flood zones.

  • So, even if you are not in a high risk flood zone, you should still consider flood insurance? No matter if your property is in a high risk flood zone or a preferred risk flood zone every property owner should consider purchasing flood insurance. The most expensive flood policy we write with FEMA for homes in preferred risk zones have an annual premium of $499. This is with the maximum coverage available with FEMA of $250,000 for the building, $100,000 for contents with a deductible of $1250. Premiums could be much higher in high risk zones and it requires a more comprehensive discussion to determine a rate. Flood insurance is available for homeowners, condo owners, and renters. The limits and premiums will vary by policy type, but start as low as $80 a year. Also, don’t forget flood insurance is available for commercial buildings, as well.

  • Do you need to buy it through the National Flood Insurance Program or can you buy it through your homeowner’s insurance agent? Most flood insurance is underwritten by FEMA and has to be purchased from an agency licensed to sell flood insurance. There are also Write Your Own (WYO) companies that will write FEMA flood insurance directly and provide the policy administration, customer service, and claims support. You still have to go to a licensed agent even with a WYO company. The rates for flood insurance are all the same no matter how the policy is written or what agent writes the policy. We have written directly with FEMA in the past, but we now write all of our flood insurance with Hartford Flood, which is a FEMA approved WYO company. They provide much better service and are very helpful when claims do happen, and are a real advocate for the client.

To find out more or to contact David, please go to