What is Flood Insurance
Flood 2.0 and Matthew Palmer, we’re going to talk about that, we’re going to show off the map, we’re going to talk about when it starts, like maybe there’s a specific date for it where you can find this information online and what we should know about it. Matthew Palmer with Goosehead Insurance, take it away, please.
Yes, sir. So one of the big changes coming in the insurance world this year is FEMA is completely overhauling their flood insurance program. And the most clear cut way we can see this, flood zones are going away. They’re done. FEMA for the last 50 years has used the same antiquated system where they go in and they make these giant flood maps. They have to go in and resolve them year after year and they’re hemorrhaging money for it.
So FEMA has, you know, probably taken a 60 percent loss over the last three or four years. Is this statistic I was looking at all for just their flood insurance program? And the reason being is that every other flood insurer is private. They’re using satellite maps that are real time.
They’re looking at the hundred year floods, the five year floods, and they’re saying here’s the situation for this home specifically where FEMA only gets to update that every five to 10 years. So what we can look forward to in the next three or four months, the tentative date for this is October 1st. FEMA is going to be overhauling their program and replacing it with what’s called flood 2.0.
And that’s going to look very similar to how private flood works right now, which would mean if you are doing business in the Houston area, in any areas by a lake body of water, no longer are you going to be looking at elevation certificates, flood zones. What you’re going to do is have to contact somebody who is with FEMA or have your loan officer, insurance agent do that and they will run a rate specific for that house. It is now a case by case basis. So rather than saying, hey, if you’re in a flood zone, a, B, X here, your rates, it’s going to say, oh, you’re living at thirty 12 months and drive.
You have to pay five hundred and fifty dollars a year just to have flood insurance. And this is important for any realtors watching because if you are in a high risk flood zone for the next five years, you’re still going to be considered a high risk flood zone by all of the banks and all the loan processing systems. And you will be required to carry that flood insurance. And that’s just an extra monthly cost that is going to be required by your loan for that home closing. So.
The big things we can look at are. Flood zones are completely going away. There’s still a few tentative changes that are slated. We think that grandfathering is going away. We think elevation certificates are going our grandmothers to grandmothers. They can stay, but as long as they’re not in floods.
OK, it’s weird, but that’s a good question. Yes, grandfathering is something that I know about, but I have a tendency to run off on insurance jargon. Grandfathering means that if you were previously in a flood zone and you made these elevation changes and got certification and maybe got that flood zone or votes and didn’t have to carry the insurance that year over year, you didn’t have to do that over again. And that’s going away.
So if you are grandfathered into a flood insurance program, you cannot do that anymore. You have to rewrite and you have to be resolved. OK, that’s going to just be a nightmare for the first couple of years. I really do expect FEMA flood to point out to be an absolute headache to get used to. But that’s Ok. Is this a result of global warming 1.0?
I don’t know. That’s a tough question because we have seen an increase in flood losses over the last 20 years and FEMA’s been taking a lot more losses. And so the result or the cause of this changes the FEMA’s not making any money. Whether that’s from global warming or not, jury’s still out.
Ok, very good. So Matthew Palmer is on team. Global warming is a myth. One point six. So that so his current working theory. Thank you, Matthew, for chiming in there. Science is not actually a thing, and we’re just moving on. So let’s go ahead with maybe showing it off and where they can get some information.
So we’re going to put in the description of Lank and you’ll be able to find that information. And it’s going to be FEMA. gov and Omkar, if we could. Let’s go ahead and split screen, if you please could. Thank you. And let’s take a look here. What we have are the risk ratings for the state profiles. Right. So tell me some stuff to kind of see here.
So what we’re going to look at with flood to point out is there’s going to be different rating zones depending on the state that you’re in. And the way that that breaks down is that once Flood 2.0 gets started in your state, in your zone, that will be the new standard moving forward if you are working on a home closing under flood 2.0.
Then you don’t have to have a 30 day wait for this new program if you are working on a refinance or if we’re just reassessing an insurance situation, there is going to be a 30 day waiting period to get flood insurance so you can’t see the hurricane and get the insurance. But if you’re working on a home closing, so for all my realtors out there, you’re going to be just fine. It doesn’t you don’t have to wait 30 days to get the house will be good.
Very good. And let’s go back here and so Omkar will go back to just us here and then we’ll ask you a couple more questions and tell me about Brandon Hurn, an individual you know as well. Right.
So Brandon Hearn, the preferred loan officer for Acquisto Real Estate. I actually first met him at a Spartan race with Captain Dave David Dilworth, if any of you all met him. He just called me up and said, hey, here’s what we’re doing. Wrote me out. And Brandon heard. I think the reason I bring up the story, that’s the best way I can describe it. He is a force to be reckoned with.
That man absolutely killed the Spartan race. He was in the, you know, high intensity, high velocity group. And he almost placed he was making record time. And my eyes, he was a former Army Ranger, very high integrity, incredibly awesome guy. I actually haven’t had the pleasure of working with Brandon Hearn for insurance yet. But I know from the clients that I have worked with who have gone through him, he was just phenomenal expert, a phenomenally high expertise individual in that loan process.
Yeah. So, yes, Brandon Hearn is a fan of yours. You just happened to be Goosehead to point out and Kyle Towpath happens to be Gus at one point. So unfortunate in that situation there. Brandon and Kyle have been longstanding business relationships. And that’s that’s a key thing, is that when you start these relationships that you continue on with them and we bring you somebody else and you can kind of know love and trust in the real estate industry.
So that’s amazing. I’m going to end this FEMA 2.0 discussion for us and just let you know that my favorite version of something and something I always look for in any version is in like version two point one point one. That’s personally my favorite version as the sweet spot.
Yeah, that’s exactly where I’m at. And the reason for it is anything that comes out in one point out. Right. You know, there’s kind of some bugs and it can be some like major bugs. And then they spend enough time and they do all these minor updates. So it goes to one. It’s like one point one, one point two. And they make all these updates. And then all of a sudden they’re like, actually what we need to do is redo this. So then they go ahead to version two and they make a major update.
So now version two comes out in its update and it’s like, oh, that’s good. So now it’s to point out. But then they’re like, oh, we changed a couple of things and like, we should have not done that. So then they come out with a minor update, which would be zero point one. So it’s two point one. And then they’re like, oops, kind of screwed something up. We have like some commas where there should be periods or whatever, and then it comes out that it’s two point one point one.
So I have a question and I want to come back to this. I want to touch one more thing to say about FIMA to point out. But my question for you is what version of Mike Acquisto are you right now, Wall 2.0 or two point one, no way past that; the best is possibly in the past? I’m not sure, at least not dominance. Chat in now with your favorite version of any software you have and will be able to have that discussion with you. Matthew, I think we’re good to go.
I have one more thing that I wanted to bring up. Yes. My biggest piece of advice for all of y’all listening right now with the new flood, FEMA 2.0 changes, I would say now is a really good time to start working with an insurance agent that if you’re looking at a house, you say, hey, we want to make an offer on this. If you have a good relationship with an insurance agent.
Text them the address and they’ll be able to say absolutely, if you’re worried, whether it’s in a flood zone or not, whether your client’s going to have to have another two thousand dollars expense a year just to have the house. That insurance agent can take care of that in thirty seconds.
Very good. Any time I can get any type of advice from a wide GMW and therefore then I’m always in on that. What? Yes.
Why GMW? Yeah, younger workforce member. And so no one wants to be called a millennial. That becomes something that’s derogatory. So we go with the younger generation workforce members. And so I just want to make sure and you love whenever you have a lot of letters, I think a person your age also identifies with that. So I want to make sure that we yes, we acknowledge that. I think we’re done with that topic. Absolutely.