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Get the Facts About Flood Insurance: An Interview with Trevor M. Tarpinian of TFI Insurance & Benefits

By Trevor M. Tarpinian

Tell us a little bit about your company and the services you offer.

TFI Insurance & Benefits is an independent insurance agency in Northville, Michigan that offers personal insurance such as homeowners and auto, commercial insurance products ranging from liability and workers comp to bonding and commercial auto coverage, as well as financial services such as life, disability and long term care insurance and annuities.

Can you briefly talk about the main reasons why homeowners should consider getting flood insurance?

When we talk "flood" in the insurance world, we are talking about unusual and rapid accumulation or runoff of surface waters from any source. This water isn't from broken water lines in your fridge, frozen water pipes under your sink, or sewer/sump back-ups. A "flood" is surface water outside of your home spilling in. The primary reason every homeowner should consider flood insurance is that "flood", as defined in the insurance world, is an explicitly excluded peril on all standard homeowners policies in Michigan. Second, 25-30% of flood insurance claims originate in low to moderate flood risk areas. Third, only a couple inches of water can cost over $10,000 in clean up and renovation. Calculate the costs of an average flood here: www.floodsmart.gov/floodsmart/content/overlays/cost_of_flooding_nonajax.jsp.

What is the basic range of options that you can be covered with flood insurance?

Residential flood policies are regulated by the federal government and consequently have very limited coverage options. They offer the individual home or condo owner very little opportunity to individualize their policy. You can elect to cover the physical structure of your dwelling and choose to cover the contents therein. Additional coverage options conveniently found in most Michigan homeowners policies, like loss of use or scheduling jewelry are not available on these flood policies.

How does making a claim due to a flood affect someone's overall insurance premium?

It does not. Making a claim on your flood insurance policy will not affect rates on your homeowners policy in the future. Since rates for flood policies are federally regulated, individual claims will not affect future premiums on one's flood policy. However, if multiple flood claims are made on a single flood policy in a 10-year period, FEMA may no longer allow one to purchase their flood insurance through an agency and company of choice, and may require that the insured purchase coverage directly through FEMA's special direct facility. This forced movement from a company could result in lost a multi-policy discount on an auto policy, for instance.

What is one of the biggest regrets you've seen homeowners have when it comes to insurance coverage for floods?

For homeowners who don't have flood coverage and have experienced a flood, it's easy to point out and say they regret not obtaining coverage after the fact. But in addition to the financial loss, there is usually a much more profound regret. Flooding isn't an isolated incident like a house fire. You don't have your neighbors there to help you through your loss. In a typical flood, you, your neighbors and hundreds of others are all affected. That vulnerability and inability to help others, let alone yourself, is a very real regret.

What advice do you have for homeowners who live in a flood area but have a limited budget for insurance?

First, deductibles start at $1,000 or $2,000 depending on the flood zone designation and can be raised as high as $5,000 on residential policies. Increasing the deductibles can decrease annual premiums. Second, if your home is not in a flood zone and you are not required by law to purchase flood insurance, but you are freely electing to purchase coverage, rather than insure your entire dwelling, you could calculate the estimated cost of replacing your basement, or the portion of your house most likely to be affected by a flood and buy enough coverage to protect this area. Third, if you live in a flood zone and are unfairly required by FEMA to purchase flood insurance, you could consult a local land surveyor to help you possibly remap the flood zone and obtain a Letter of Map Amendment (LOMA) from FEMA.

What's the best way for people to contact you and your company?

Our toll-free number is 888-339-9773 and you can email Trevor directly at trevor.t@tfiins.com regarding more information on flood and homeowners insurance.

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