¶ Introduction to Flood Insurance Discussion
So , deacons , if they do face these tragedies , where they're helping those victims who have flooded , you show an extra measure of grace and care for them as they get through the traumatic event Welcome to the Reformed Deacon a casual conversation with topics specifically designed to help local Reformed deacons .
There are nearly a thousand deacons in the OPC alone , so let's take this opportunity to learn from and encourage one another . We're so glad you could join us . Let's jump into our next episode .
Hi , my name is Peter Haynes . I live in the mountains of northern Arizona , attend Concho Valley Orthodox Presbyterian Church and , by God's grace , I serve as an elder there , as well as serving on the OPC Committee on Diakla Ministries . You probably recall that back in July I spoke with David Drake and Chris Lennon about personal insurance .
If you want to check it out , it is Season 3 , episode 16 . This episode is a sort of related discussion . Today we're tackling flood insurance , a topic that often feels a bit distant until it's not .
We'll tackle why it's important , how it works and what it means for our responsibility as stewards of what God has entrusted to us , and how deacons can work with congregants to wisely decide on its relevance to them . I think this discussion could be a particularly good resource for deacons as they work with church families through budget evaluations .
I'll be talking with Brian Tilton about flood insurance . Brian is the co-owner of Milham Companies , a personal and business insurance company in Pennsylvania . Brian serves as a deacon at Trinity OPC in Hatboro , pennsylvania . Hi , brian , it seems like flood insurance is one of those things that a lot of laymen get wrong .
There's popular misconceptions out there about who can
¶ Common Misconceptions About Flood Coverage
get it and who can't . Could you start by just simply clearing up any of what , in your experience , are a few misconceptions . So we're all on the same page .
Yeah , I'd be happy to do that , peter . I've been in the insurance industry for over 40 years , so I have some experience along these lines and served as a deacon for over 20 years at Trinity Church in Hatboro . Flood insurance is a bit of a mystery to most people . Everybody knows they need homeowner's insurance . Everybody knows they need auto insurance .
Flood insurance is one of those things that people put on the back burner . They think it's never going to happen to them . It's usually not required unless the mortgage company requires it for settlement . So a lot of people opt not to get it , hoping that nothing happens to them .
So one of the misconceptions is that oh , I have homeowner's insurance , therefore my homeowner's policy will cover if my house gets flooded . Well , that's not true . All homeowner's policies exclude flooding . Flooding defined as rising waters , overflowing creeks , overflowing rivers , a lot of rain in a short period of time that creates flooding .
Homeowner's policies are not designed to cover that at all . So that's a misconception . If you want flood insurance , you need to purchase a separate flood insurance policy .
You can get a little bit of extra water protection coverage under your homeowner's policy , for instance water backup coverage for a finished basement , but you cannot buy flood insurance from a homeowner's insurance company . It's through the National Flood Insurance Program , so that is a mystery to a lot of people .
But today we'll try to clear up some things about that .
So you mentioned that it's not a part of homeowner's insurance , that it's a separate thing . Is it only for homeowners , or can renters also get flood insurance ?
Generally speaking , a homeowner will buy this coverage because the critical coverage is the house . If your house floods and becomes damaged or inundated with water , it can cause a lot of damage . If you simply have contents , oftentimes you can elevate your contents to a higher level or you don't own that much in the way of contents .
So it's more critical to have flood insurance . If you own a building , own the house . But yes , renters can purchase flood insurance at a fairly low cost , but it's not as common to do that .
I think you
¶ Determining Risk and Requirements
mentioned , it's not necessarily required by law to have flood insurance , but some mortgages will require it . Is this if you live in a flood zone or a typical area , what other things would make us have to carry it ?
That is correct . So if you're in a flood zone and we can help determine if you're in a flood zone , but if you're in a flood zone you will not get a mortgage without flood insurance because a mortgage company will make that a requirement to provide the loan .
They do not want a house that they're providing a mortgage on to be swept away in a flood and the homeowner not to have any coverage , so they will mandate it at the time of settlement or at the time you take out the loan . So the way to determine if you have risk for flood insurance at least higher risk you would go to a website called floodsmartgov .
Floodsmartgov , that is a national website that indicates your level of risk based on your address . So it will determine historic flood areas , flood locations , it will often determine elevation and it will indicate whether getting flood insurance is a good idea for you or not . So floodsmartgov , enter your address for you or not . So floodsmartgov , enter your address .
That will help determine the risk . You'll be given a different grading based on where you live , and then they do drill down on that further by getting exact elevation measurements how high above sea level is your house ? How likely is your house to have a flood , so be sure to write down that web address if you're curious as to what your risk is .
That's a very good resource .
So some people might believe that because they can rely on FEMA in a flood , that they don't need any kind of extra insurances . What would you say to that ?
Well , that's how a lot of people think and , in reality , how it often works . So flood insurance is not purchased very often . It is optional . Again , most people feel they're not in a high flood risk area , so they don't buy it . And then all of a sudden , rains will come in a particular
¶ FEMA vs Private Insurance
area , get stalled out over that area , creating massive flooding and leaving people with a lot of damage . So it is important to buy the coverage . I think of the recent flooding in North Carolina . People in North Carolina would not have anticipated that a hurricane would get stalled over the mountains , causing flooding downstream in the foothills of the mountains .
So that's a situation where it would be important to get that type of coverage . Is there anything else that North Carolina residents could have done ahead of time , besides flood insurance , to help protect them from the disaster ?
that came , of course , in hindsight , good if everybody had flood insurance . But going into that , no one was predicting that level of rain from a hurricane to come that far north and do that much damage , so it's very difficult to plan ahead for anything like that .
So in general you can provide landscape grading that tends to keep drainage water away from your home , but these floods come so quickly that you don't have time to react typically Put up sandbags . So there's not a lot in that situation that a prudent person would have done differently based on the low risk .
Now , if they're along a creek and along a drainage area , you perhaps could have anticipated some flooding and taken some precaution . But that is a unique and different situation . That is not what we normally see for floods . Usually we see them in low-lying areas , near the coast or near a river .
The question is kind of about that in a broad way , several questions in the same question . The average homeowner may think that flood insurance only applies to those who live near water . They would say that's a high-risk area . But floods don't always respect that , like we saw in North Carolina .
Heavy rain , overflowing rivers , hurricanes and even snow melt Essentially any water that inundates land that's normally dry . Does that mean everyone should have
¶ Cost Factors and Coverage Options
flood insurance ? And then wouldn't my insurance provider have told me , hey , you should have flood insurance if I need it ?
Yes . So it'd be great if everybody just paid in flood insurance . It would lower the cost . But they don't want to make it 100% mandatory , so they have not gone to that step yet . So therefore , you have a few people buying flood insurance , which tends to make it more expensive and there's less money in the pool .
But in terms of risk , if you're in a coastal location I think of Florida , new Jersey coast , other coastal locations you're at a much higher risk for flooding because hurricanes can come up the coast , can raise the water level with water surges and create damage along the coast . But also lower level elevations are at risk too .
So if you're near a river and you happen to be in a lower elevation , those are the higher risk areas . And you mentioned earlier about FEMA . If you don't buy insurance , you will get some coverage , typically from FEMA . The problem with FEMA is the delays in payment . You have to apply for coverage . You're not sure what you'll get paid .
You're not sure how long it will take to get paid . So , again , if you're in a risk area coastal risk area , low elevation area you will want to buy the coverage because the coverage will work better than the FEMA answer .
But in reality a lot of people don't buy the flood insurance , so FEMA has to step in to help these people who have not decided to buy their insurance ahead of time . Generally speaking , snowmelt is not going to be an issue unless you have massive snow accumulation at higher levels and you live at lower levels in the path of potential snow melt .
But usually you're not going to get major flooding in a typical neighborhood from snow melt . It's going to be related to massive accumulations of snow .
We've had a little bit here in Arizona . I live at elevation I'm at 7,000 feet and sometimes if we have a good winter and we get a good snowpack and then suddenly we get a nice warm time and then we call them monsoons it's really funny to me .
We get a heavy rain , so it'll mix like the end of April and May We'll get the snow melting while it's raining at 7 000 feet . I've had to go around a different street because there's a three foot river across the road . That wasn't there before yeah it doesn't happen often , but every once in a while , so it's even at 7 000 foot elevation .
Flooding is something that can happen because of our snow yeah , because of the accumulation up in the mountains it can be a torrent of melted water . That is correct Melted snow .
Another question is is flood insurance one size fits all or are there degrees of coverage ?
So it's based on a number of factors . One , the value of the home . If you have a small home and you don't need much coverage , it's going to be a lot less expensive than a huge home that needs more coverage . If you're in a non-flood location , that rate's going to be fairly inexpensive .
If you're in a high-risk flood location , that rate's going to be more expensive . So there are factors like that that go into coverage . You can choose a certain amount of coverage for the building . You're not likely to have a total loss to the house in a flood . A home catches on fire can burn down to the ground .
A home that's damaged by flood typically is a flood that comes through but does not remove the structure from its footings . It just creates a lot of damage .
So often you can buy flood insurance but maybe cut back on the coverage and not insure the building to 100% , but insure it up to the limit that you think would be damaged if you did have a serious flood . So it's not a one-size-fits-all .
It's very specifically rated , based on location , zip code , geography , elevation , level of coverage and then finally , the deductible you choose . You can choose anywhere from $1,000 deductible to a $10,000 deductible and you might think , well , I don't have much risk , but I want to have some flood insurance .
Might think , well , I don't have much risk , but I want to have some flood insurance . Therefore , I'll get a quote , but use a higher deductible of $5,000 or maybe $10,000 . So it's there for catastrophe , but you're not going to submit a smaller type claim .
So regarding costs , would it be possible to give us a little bit of a specific ? So say , I have a friend who lives in a three-bedroom , two-bath home along the Schuylkill River . Approximately how much would they be expecting to have flood coverage of some type ?
Yeah , we can work on that . So along the river I think of the Schuylkill River , I think of Delaware River these are prone to chronic flooding . If you get a lot of rain you will have the rivers overflow their banks . So if you have a home along the river that's subject to flooding , that's going to be fairly expensive .
If you decide to get flood insurance and you are in another location in Delaware County or Bucks County or somewhere far away from typical flooding , it'll be much less expensive . So if you're getting low amounts of coverage in a non-risk area , you may be paying $500 to $800 a year for your flood insurance coverage . That's considerable , a low rate .
If you are in a higher risk area , you could be paying upwards of $2,000 to $3,000 a year for your insurance . So it is a big cost , particularly if you're in an area prone to flooding . So price ranges that I've seen I've seen the lowest $600 and the highest around $8,000 . So that's the range .
It does vary quite a bit based on risk and based on elevation . That's very helpful , thank you .
So , Brian , what would you say to a homeowner to determine if it's
¶ Pastoral Approach to Flood Victims
worth it ? Is it a mathematical thing ? Is it a feeling of comfort thing ? Is it both ? What do you do to decide ?
Well , that's a difficult decision and a personal decision . Some people have a higher tolerance for risk . Others want to ensure every scenario . So the first step would be to discuss it with a knowledgeable agent . You probably already have an agent that handles your homeowners and auto insurance . Have a conversation with them .
Do they feel , based on your location , which they should be familiar with it warrants paying for flood insurance ? So that would be the first step Talk to a knowledgeable agent . Go to that website I talked about and determine your own level of risk .
If you're at a higher elevation and away from water flooding areas , you may see all these reports on TV of homes that are flooded and get quite upset and worried , but in reality , statistically , your home is not likely to be affected by flood . So determine your level of risk based on rating factors and then finally get a sample quote .
If you get a quote and find it's $800 premium and you think that's a reasonable premium , to give you some peace of mind about that , it might make sense for you to go out and buy the coverage . If you find out that it's quite expensive , you know , maybe you want to make other considerations or choose a higher deductible .
So actually get a quote so you know what dollars you're talking about , and that will help you make your decision for you . Thank , you .
That's great advice . So some deacons and others in the church might be tempted to think that a homeowner whose home was flooded but didn't have insurance was being negligent . Is there any truth to this notion that ?
How would you , as an OPC deacon but also an expert in this matter , encourage deacons to view those in our church who are victims of significant floods without proper coverage ?
They are to give good advice to their members in their church . They certainly are not to be judgmental in stating that well , you should have anticipate this rare storm that might come through to do that type of damage , and human nature might be to procrastinate a little bit . There's so many things to spend money on .
You're spending a lot these days on homeowners insurance . You're spending a lot on auto insurance . You know it is difficult to come up with another $1,000 or $2,000 for flood insurance if you don't perceive you have the risk .
So , deacons , if they do face these tragedies where they're helping those victims who have been flooded , you show an extra measure of grace and care for them as they get through the traumatic event . To have your home flood is devastating . It takes a while to clean it up . It takes a lot of expense to clean it up .
A lot of times neighborhoods will rally together , but certainly the church should be there as a backup to provide assurance to the person who has had a flood and physical assistance if rebuilding is needed . So one thing you know some of these members wondering if they should have flood insurance .
They should talk to the neighbors , you know , have they ever experienced a flood in the neighborhood and again talk to the agent to determine whether it's worth doing that . But in reality ,
¶ Practical Steps and Resources
even with all the facts and statistics ahead of time , a lot of people don't make the decision to buy flood insurance . So we should have an extra measure of grace for those facing these tragedies without proper coverage .
So , as we wrap up this episode , for someone who's listening today , who might be feeling overwhelmed by this information , what than one really .
So first go to floodsmartgov , determine your risk , get knowledge , read about flood insurance , what it covers , what it doesn't cover . If you're merely concerned about your basement flooding , you can buy sump pump backup coverage . You can buy drainage backup coverage for $100 under your homeowner's policy . That may satisfy your biggest risk a flooded basement .
But if you are more concerned about the broader , more serious flooding , then again go to floodsmartgov . Determine your risk , discuss witha knowledgeable agent , which we've already talked about . Go around to your neighborhood and discuss what are your neighbors doing ?
You're likely to find your neighbors aren't buying this flood insurance either , but maybe discussion should be held on a neighborhood level to determine , you know , whether there's some wisdom in pursuing these quotes . And then , finally , as deacons in the church , they should be familiar with the geography that they're in . Is it a high-risk location ?
If so , they should meet with members of the congregation to help discuss these issues . Insurance more broadly property casualty insurance is a broad topic that the deacons should cover when they meet with their members . That the deacons should cover when they meet with their members .
And then , more specifically , flood insurance , particularly when we see all these flood events on TV , including floods that affect the OPC denomination , including floods that affect members of our local churches . We want to be proactive in planning and thinking ahead of time wherever we can .
Well , thank you , brian , for joining me today to talk about this important yet somewhat complex subject . Hearing this has been helpful to me and I hope it's been just as beneficial
¶ Conclusion and Encouragement
to our listeners . God bless .
Thank you , Peter . Thanks for joining us . Go to our website , thereformedeaconorg . There you will find all our episodes , program notes and other helpful resources , and please make plans to join us again for another episode of the Reform Deacon Podcast .