Talking Insurance Episode 1: Flood Insurance in West Virginia and Kentucky

About the episode

This is our first “Talking Insurance” roundtable from Bray & Oakley Insurance Agency. We are excited to share with you the answers to common questions, dive deep into the information you really need to know and share our stories and experience from over 100 years in the insurance industry.

For our first episode, with the recent flooding in our area, a few of our Bray & Oakley team members sat down to discuss flood insurance, coverages, qualifications, important steps to take and some information not commonly known about making sure you have the right policy for your property. If you have questions about flood insurance in West Virginia and Kentucky, this is time well spent.

Claude Stapleton, Danny Crum and Michael Winter are your hosts for this week’s “Talking Insurance”.

Listen to Episode One:

Let’s go. I’m officially recording us to start. Yeah, we’ll get started. Go ahead, Mike. We’ll start with you, Michael.


Michael winter. I’m the chief coffee maker at Bray and Oakley Insurance Agency.


That’s true and so on so many different levels.


Since he’s vice president, yeah. You’re also known as vice president,


Also known as vice president. Got it.  Danny, do you want to go?


Yeah, I’m Danny Crum. I’m the sales manager at Bray and Oakley Insurance when Michael’s not around to make coffee, I fill in for him.


That’s good. I’m Claude Singleton. I manage the Lexington office and the Richmond office in Kentucky.


Great. Well, I’m BG. And Mike is with us here. And of course, we’ll just be talking about insurance together. We’re just here to help facilitate the conversation with you guys. And I’m excited about learning more about insurance, both personally and for those who might be watching or listening on a podcast or watching on YouTube. So flood insurance is the topic today. So I guess we can start chatting about that. And it’s big on people’s minds and hearts right now in Kentucky. And so we can just start with the questions that people are asking: what are the main differences between NFIP and private flood insurance for folks who are interested in knowing more about it? Whoever wants to take that topic?


That’s a good question. That’s a question we get all the time. Private floods are becoming very popular. Used to be all you had was FEMA. It was you know, the NFIP is the National Flood Insurance Program, it accounts for the vast majority of policies written and it’s backed by the Federal Emergency Management Agency, which everyone knows is FEMA. And before, that’s pretty much what was offered to you. Now, some of these private companies are coming out with their own flood insurance, which is the private flood carriers, and it’s starting to take a storm, it’s new, but it’s catching hold. It’s almost like, you know, you can purchase insurance from State Farm or Erie Insurance or state auto, or whoever. And these private carriers are now offering flood insurance pretty good stuff.


So some of the differences. We started noticing. We were used to the NFIP program, we were very hesitant on looking at the private carrier flood program because there was some ambiguity with you know, what, how did they respond? You know, there was some language that lenders didn’t want to accept the private carriers, because there were a bunch of kinds of technical issues that weren’t getting worked out. And then and then they passed this Biggert-Waters Act which allowed banks to accept the private flood insurance carriers. A lot of the difference we noticed in it is that the building values private flood carriers can offer higher building limits. The NFIP program, it’s a set limit, they have $250,000 on the structure, and I think it’s limited to 100,000 contents. Yeah. NFIP has to be ensured in all states and all the communities that the Flood Insurance Program operates in so they have to be a little bit restrictive, the private flood carriers, they can pick and choose which areas they want to provide flood insurance to, so they can actually pick the good areas and offer better rates. And they can offer better rates, they can even offer additional coverage.


Yeah, the private flood is much more broad. And this all began and just to give a little history of flood insurance in 1968, FEMA, flood maps were created. And Congress actually passed the National Flood Insurance Act, which allows banks and things to require homeowners that were in flood zones to carry flood insurance. And so you’re seeing a lot of that, especially in rural areas like West Virginia and things, but the private flood is somewhat more broad than what FEMA offers. Like Michael was saying, typically you can get up to $500,000 in coverage compared to 250,000 sometimes higher. Loss of use is a big coverage that the private flood offers compared to FEMA which means just like if you lose your home to a house fire your insurance carrier will actually, usually provide you loss of use meaning they’re going to put you up in a place to live provide you some monies and things to do that will private flood carriers typically do to so. There’s a lot more broad per se than what the FEMA offered, that don’t mean it’s better. It’s just you know, sometimes it’s sometimes it isn’t. It just depends on the risk really I

I think something Michael said is important on the, on the private carrier flood insurance, if they feel they’ve got a niche, and they can take advantage of it, they do that. And in doing so they’re more competitive. And in general, the pricing is lower in general, again, because they don’t have to take everything. As Michael said, with the National Flood Insurance Program, they’re taking everything. So they’ve got to take a terrible amount of risk, and try to balance that out across the nation really, but the private carriers can choose. And then within areas actually pick out a street that’s in one area that gets an even better rate, it’s right next door to another street. But it’s because of the flow and the slightly greater altitude or whatever, it’s got that much less of a chance of getting flooded out. And so people on that street will enjoy better, right, and then their neighbor, just a street over even, it’s amazing how the private carriers can do a good job with that. And if you can qualify for the private carrier, I think you’re better off, probably the best thing would be, I can give you a commercial right here. Give us a call. And we will be glad to run a quote for it. There’s no obligation for that. But let us know what we got to do.


Yeah, that’s a good point. One of the big selling points with private flood, compared to FEMA, is what’s called flood elevation certificates. So if you’re being insured under FEMA, the National Flood, then if you’re in a certain flood zone, they’re requiring you to have what’s called an elevation certificate. And what that is, is a surveyor will actually come out and they’ll survey your home in relation to the floods, meaning they’ll measure the first floor of the home set for the home, what kind of foundation you have, and where are you where your home sits on the floodplain. Alright, so that can actually help you, it can act, sometimes it can hurt you, but within the private flood carriers, all you need is a determination. And that means and you can find that through most banks or online, they will give you usually a flood zone a b, c, d x, whatever. And if you’ve got that, they’ll provide you an accurate quote without having an elevation certificate. Again, an elevation certificate is not always a bad thing. Sometimes it’s good. It depends, especially in rural areas like ours. I had a client one time, here’s a little story that he had flood insurance. And it can get very expensive in rural areas, like I was saying, and he was paying a whole lot for it. Well, he called me about homeowner’s insurance. So I was out inspecting his home. And I noticed around the bottom of the house, there were some really nice facia blocks. Everything looks really pretty. The home was up in the air. And I said, “Keith, I was like, did you raise your home?”. And he said, “Yeah, we got flooded four years ago. And so I had someone come in and raise my home up.”. I mean, it was sitting, probably six feet up, one story home. And I said, “How’d that help with your flood insurance?”. He said, “What do you mean?” I said, “Did you call your agent and tell them that you raised your home?” He’s like, “No, I didn’t think about it” I was like, well, there’s a good chance that now your flood, your home being raised up. You may not be in the flood zone, like you were in relation to the floodplain. He said I thought about it. So he and I got on the phone and we got a surveyor out there. And he was paying about $5,000 a year for flood insurance. It was crazy. Once they did the survey and I recorded his flood insurance, it went down to $1400. Well, I was Yeah, yeah, this is. So needless to say he was extremely happy. We were extremely happy. But that’s just part of what we do. You know, because we look at all of our risks that we ensure we go out with the home, we do the measurements, we get photos, and all that stuff. And we try to do a good job for our clients. And, you know, anytime you can help somebody, it’s always better for them. And as I’ll never lose this guy, he’ll always be with us. Absolutely. Absolutely.


So you will send somebody out from all of your locations to do that?


Yes, yes, we do. Not for flood insurance. We do inspect some flood risk, but any home that we insure within the agency, that is with a standard carrier, we put feet on the ground. We look at. We go out because, you know, I’ve talked to a young lady in Richmond today. And she’s young, she’s I think 29 years old. Masters in nursing, travel nurse, good job. And she’s purchasing close to half a million dollar home. And she had got some quotes in other areas. Right? And so I get to ask her all these questions and I was like, Sidney, I was like, you know, what’s your square foot? Well, you know, I don’t know and all this I said, Well, how many posts have you had? She said, Well, I’ve had five I said Is anybody came out and looked at it measure to ask you any square foot no, they just got on the internet and looked at home up and that is what they’re trying to beat quotes by. So, I get a little deeper into that and I’m like, so what are they coming back with for your coverage A which is replacement cost of the dwelling. It was almost half of what she’s purchasing the home for. That said, you realize what they’re what’s going on here? And she’s like, No, I was like, well, they’re trying to, they’re offering decent quotes, as far as premium goes, but you’re under insured. You’re not protecting your risk. And she’s like, well, what do you mean? Well, you know, your 300, you’re purchasing a home for four or $500,000. And they’re coming back with $250,000 coverage. And she’s, well, I didn’t realize that that’s what you know. And that’s why we do what we do. This happens all the time. It happens all the time. We go out, we measure houses, we take pictures, we know what we’re insuring, because you know, a home is the largest investment that most people make. Yeah, and and let me tell you something, I’ve been in the insurance business for 10 years, and I’ve had clients that have had total losses. It’s devastating. And you don’t realize what you lose until you go through something like that. It can absolutely affect our lives. So negatively, it just can just change everything. So you know, we take it personal, and to this day, knock on wood, everything that I’ve done, or I’ve had to claim, I have clients that call me crying, weeping. And you know, thank you, thank you for what you’ve done. You took care of us, you know, we had the worst day of your life, and now you’ve made it better. It’s not easy. It’s better. So here’s why we do it.


Yes, and to lose stuff is terrible. But financial backing is a great assistance. Because right now with the flooding in Eastern Kentucky, there’s just such a tragedy for sure. And hopefully, there will actually be some flood insurance that perhaps we can help them with in the future as they receive FEMA grants and things like that. And if they choose to go with us on the flood insurance, that hopefully for the future, they will be better off in the event of another bad circumstance, just a terrible, terrible tragedy.


And that’s one that is one good thing about FEMA that I’ll point out is under FEMA, they have to offer you insurance. So anyone can be insured no matter what it doesn’t matter what flood zone you’re in, where you’re at, if you’ve had been flooded before whatever. It’s offered to everyone, and I think, of course Eastern Kentucky. You know, we’ve gotten a lot of calls over the last week or two about flood insurance and a lot of people lost a lot of stuff and they will be able to purchase flood insurance. I mean, they’ve had a total loss, FEMA will insure them. So that’s one good thing about the FEMA and National Flood Program.


One of the main differences between the NFIP and the private flood insurance is that we’ve kind of hit around it, but we really didn’t even we don’t really mention it is what NFIP will offer, they don’t cancel you if you’ve had a flood. Now, they will offer you a renewal. It’s a guarantee it’s a very stable program. That’s what it was made for, it was for stability and assurance. I mean, we’re, you know, we’re, you know, these policies are backed by the good faith of the FEMA program. You know, you know, a lot of independent agents don’t worry when there’s a major flood that hits an area, you know, because what happens sometimes in the private carrier market is that, you know, you have an area that’s been prone to have some extra unusual amount of losses, carriers get nervous, and they pull out those areas and cancel. So, you know, sometimes when you call your independent agent, this is what you really need to do is when you speak to your independent agent, that’s what they can do. They can offer you several options, but they need to see, you know, how much risk tolerance you have, you know, I’m not mean I’m not questioning their carrier because there are billion dollar carriers and they can pay claims really well. But the NFIP program, which I like, I’ve known it to always pay the claims they do a pretty good job now. Now the private carrier market does offer some bells and whistles that are very attractive. But one thing you’re going to know is that the NFIP program will provide you with a renewal, you’re not gonna get canceled if you have, you know, a couple claims. It’s really good. And I think there’s some price stability as well, with that program that you might, which I’m not very familiar with the private private insurance market for flood, Danny is a little bit more familiar with it than I am. But one of the things is sometimes if you have people who have a low risk tolerance and they want stability and they feel comfortable with that. That’s one of the things that you can mention to them. But that’s what you get when you call an independent agent we’re here to evaluate your risk and how much you can tolerate and then you know, give you some options and even help you make the choice.


Yeah, I think the sweet spot for the private flood carriers I’ve done quite a bit of and lately I’ve really worked on educating myself on it and doing some quotes and things I think where they really shine is that mid level risk, if that makes sense. So you know, you got your worst flood zone, let’s call it flood flood zone Z, you got your best, we’ll call it A. So they really fall in between on that, you know, say j or k that the mid risk level, that’s where they’re really, really good at. I have run into cases where some banks will not accept private flood insurance. It’s, I haven’t really sat down and talked to them and asked them why. But I have run into and I’ve provided all the jackets, the policy jackets, and so forth, but for whatever reason, some of the larger banks tend not to accept it at least, you know, West Virginia can speak on behalf of Kentucky, but you don’t see anywhere near the flooding and stuff. Okay, Pikeville, Kentucky, Eastern Kentucky Yes, when you get around Lexington and Richmond, things like that. You don’t see it as much. But here in West Virginia, I’ve had some banks that would not accept private flood markets.


No, some of these larger banks are probably worried about being in compliance with the FDIC, they require banks to, you know, protect the collateral or depositors money and, and you know, there’s some ambiguity when it comes to some of these new private flood carrier markets. Like the private flood, the definition of flood has to be as broad as the NFIP program, and, and then they put in some reassurances, to help make some of these banks feel a little bit better. I think it was in 2000. I think the Biggert-Waters Act kind of tried to help clear some of this, clear some of this up but there’s still some banks probably a little bit apprehensive, but I can understand why.


Yeah, for sure. For sure. How do you determine what is a flood zone? And how often does that change? If a location floods for the first time? Does it get defined then as a flood zone? And if a place hasn’t flooded in 200 years or 100 years? Is it no longer defined as a flood zone? How does that get determined? Who does that?


That’s a good question. And not again, I think 1968 FEMA, that’s when they introduced flood maps and it all had to go in compliance with the National Flood Insurance Act and with the banking and things like that these flood maps do get reevaluated every so often. And it’s more along the lines of your right as voters in history involved in it. There are some proximity to waters, rivers, typically things like that play a big part of that. Over the 10 years I’ve been here I’ve seen the map. I think Michael may be able to answer this better. I think they changed once where they came in and actually redone all the mapping, sometimes it helps, sometimes it doesn’t. But yeah, it’s just one of those things, and it doesn’t risk does matter where you’re located. Elevation of course, why do you have elevation certificates? So yeah, but I have also seen, you know, addresses that never flood have horrible, horrible flood zone ratings. And I don’t really have an answer for that.


Some of the rating, and some of the changes can be affected by local governments who have for example, Lexington, has got several teams that work on a waterflow here in here in the town and over over history, they’ve improved in some of the areas of towns that have flooded in the past are flooding less now because of management of that water. And they are allowed to petition for change in the rating for the particular neighborhoods that they’re talking about. And that can happen. And sometimes that goes back to where we have had to request elevation certificates for specific homes that we were aware of. In fact, I’ve got a client who actually was an engineer and he says, I’m worried that this street has been worked on and I’m going to order a fresh certificate and sure enough, it was an advantage for him. He was just a very good guy to work with on that because he was sharper than sharper than I am. Engineers, yeah.


I guess for the listeners and the viewers we want to make sure they don’t have a misconception that they don’t leave flood insurance if they don’t live by a body of water or by a river right I mean that’s that has nothing to do with it. And people should make sure that their home is properly protected and have someone evaluate where they are and in and make sure that they’re properly covered. And that’s where you guys come in. Right?


It’s a good question. And I’ve had clients call me who say there’s no way there is nowhere near any risk for flooding per se bodies of water that want flood insurance are interested in flood insurance to help them sleep better. And honestly, it’s usually very inexpensive for those clients. So yeah, look into it. It’s odd. You know, when you get into your risky flood zone, you get into some more premiums and stuff, but, you know, so flood insurance for two, 300-400 dollars a year to people that’s in very low risk areas. And you know, there’s a little stream maybe close to their home and there’s some, you know, there’s some things that can happen that could trigger a flood policy to kick in. And my church is one of those, you know, we’re not in the flood zone. But we wanted flood insurance and, you know, for different reasons or whatever, it helps us sleep better. We’ve got a lot, we’ve got a very nice building, it’s very old. It’s very well maintained and has a lot of money and for the price we decided to buy. And so yeah, if anyone’s interested in flood insurance, don’t think it’s because you’re not near a body of water, or you’re typically not in an area that floods badly. No, call us, call your agents, let us look at it. Typically, if you’re not one of those extreme floods, just very affordable.


Great. I was kind of shocked. So I’m from Clendenin. And I remember when…


 You can’t get there from here can you?  


It’s a distance. But I remember when the 2016 floods came through Clendenin I was actually really shocked by so many homes, my brother’s house only got just a few inches of water in it. You know, you think of flooding, you think of houses up to the rooftop, you know, underwater, but I think his house only got like three or four inches of water in it. But it was enough to ruin almost the majority of his main duct line, it was enough to ruin his main feed into his electrical panel. There were several systems throughout his house. And I mean, it was quickly like 10, 30, $40,000 worth of damage that was wrapped up, and to BG’s point a minute ago. I mean, it was an area that hadn’t flooded in 100 years or something. They had no no record of flooding, but it just took three or four inches of water to cause gosh, a ridiculous amount… a whole, you know, air conditioner switched out electrical system change out. So.


It’s astronomical. My parents We had a flood here in southern West Virginia in 2000… 2012 And my parents hadn’t been there and there hasn’t been a flood where they live in over 100 years. So when my dad retired they paid their home off, they had to have flood insurance because the longer they dropped their flood insurance came through and like you said, you know, they got 10-12 inches of water $62,000 Wow, that much damage.


There’s a problem with water that is similar to fire of all things. Let’s just say that in this scenario, no one is injured and there’s just a slight incursion of water it’s inside the house was not washing everything away the water causes a lot of damage as a fire would do. With a fire and smoke, you’re getting smoke all over the place. So you get poisons everywhere. With water, it promotes the growth of bacteria rapidly. And so if you don’t have an excellent drying out program, and also deep checks of water saturation, your walls can be hiding all sorts of mold build up and it’s going to be terrible. So it’s it does not take a great deal of water inside the home to be so devastating. And sorry to hear about your that was your brother was it Mike. Yeah, that’s that stuff that’s up. But that’s a tragedy. And then later it can be continued to cause breathing problems if it’s not been handled properly. And and that can be expensive. Yeah.

I always tell everyone water claims are the worst claims to have. In my experience, what I’ve had to watch customers deal with and they are the worst claims to ever deal with.


So people are concerned if they’re, if they’re clued in a little better now and they understand the need and the urgency of the matter. How do they get in touch with you guys for information on how to get evaluated? Has somebody come out to talk to them about flood insurance? What’s the best process?


Good question. You can always reach us on our website at we have social media pages across every platform. There, and each one of our locations, which is Pikeville, Kentucky; Richmond, Kentucky; Lexington, Kentucky; Weston, West Virginia; Logan, West Virginia; Chapmanville, West Virginia. Phone numbers are available on our website. You can call us again. We’ll come out and get very personal with it. So we’re probably gonna come out, look at your home and look at your risk. We’re going to advise you. Professionally, the way we think you’d be insured.

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