Many of our clients come to us because they have discovered, often times after going under contract to purchase a new home that the house is actually inside of a flood plain. Oftentimes, the home buyer is unaware of this until they receive a note in the appraisal stating that the home is positioned in a Special Flood Hazard Area (SFHA) as designated by the FEMA flood plain maps for the local area. The mortgage company will now require mandatory flood insurance as a condition of the loan. This can create a little bit of chaos for the prospective home buyer, and one of the questions at top of mind becomes, how long does a quote for flood insurance take to obtain? The answer is, it depends on what kind of flood insurance you are trying to obtain.
Private Insurance vs NFIP carriers
Traditional flood insurance that is provided through the NFIP (National Flood Insurance Program) is somewhat of a longer process to obtain – the bright side of this is that virtually any home that is in a flood zone can be written through NFIP as long as the home is in a participating community. Why does a quote for flood insurance through NFIP take more time? That is because of the process that it takes to write this kind of insurance. Many factors must be taken into account when writing NFIP insurance, such as what is the BFE (base Flood elevation) and is the property Pre / post FIRM (Flood Insurance Rate Map). The longest part of this process is acquiring an elevation certificate. This is a form of a survey that is made for the specific property to determine various metrics about the property needed to obtain a rate.
This is where private flood insurance can shine over the NFIP policies (in addition to often times being cheaper if the property qualifies) Most private market flood insurance companies will utilize more advanced mapping systems that have elevations built in, and are therefore able to obtain a yes or no determination in moments. The caveat of this is that private insurers may not choose to insure some properties if the flood risk is deemed too high. Elevation certificates may still be utilized by private flood insurers if more detail is needed to make a decision on a particular property.
If your property does qualify for a quote through a private flood company, a policy can often times be bound that day via an online or over the phone payment. This may depend on if your mortgage company will want you to pay for the initial premium directly, or if the insurance company will allow a payment to be made at the close of escrow (a title company would send the check to the insurance company in this instance) The private flood insurance carriers all differ slightly in their methods on this, so be sure to coordinate with both your loan officer and flood insurance agent to ensure payment is submitted correctly.