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The original item was published from 4/12/2016 12:48:06 PM to 5/13/2016 12:00:06 AM.

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Township News

Posted on: April 12, 2016

[ARCHIVED] Township News - Need Flood Insurance?

Need Flood Insurance?
New Website Helps Homeowners Find Affordable Options

Mike Megoulas has lived in a Dauphin County township for more than a decade and never thought twice about flood insurance. In October 2012, however, he received a letter from his mortgage company notifying him that his house was in a flood zone.
Flooding at Megoulas’s house has been rare. For instance, there was the time in 2011 when Tropical Storms Ivan and Lee hit the county and left several inches of water in his basement.
“When I bought my house,” he says, “I never even knew I was in a flood zone — and now I need flood insurance.”

Plugging a financial drain
Many homeowners in Pennsylvania and elsewhere are finding themselves in a similar situation.
“For most Pennsylvanians trying to buy individual flood insurance coverage, especially for their homes, the National Flood Insurance Program (NFIP) run by the federal government was thought to be the only option,” state Insurance Commissioner Teresa Miller says. “However, now that Congress is mandating that federal subsidies end for NFIP coverage and that premiums be based on the property’s actual risk, costs for this coverage are rising and may become difficult for many homeowners to afford.
“In addition, redrawn Federal Emergency Management Agency (FEMA) maps are placing many properties in flood zones that had not been there before. That’s why my office is committed to finding ways to help consumers identify lower-cost coverage.”
The agency, for instance, has created a new one-stop shop at, where homeowners and renters can find information about available insurance. (Note: To access the page, click on “Flood” under “Top Pages.”)
For decades, Miller says, the National Flood Insurance Program kept its premiums artificially low, but an unprecedented number of claims following Hurricane Katrina sent the program into billions of dollars of debt.
The result? Large premium increases.
The good news for Pennsylvania consumers is that these rapidly rising NFIP premiums are making flood insurance more attractive for private market insurers, which are in many cases offering coverage at substantially lower costs.
Just ask homeowner Mike Megoulas.
“In 2012, my property was remapped into a flood zone, and I was told I had to buy flood insurance to keep my mortgage,” he says. “NFIP insurance would have cost me $2,700 a year, but I was able to find private coverage for only $718 annually.”

Pinpointing insurance options
Most private-market residential flood insurance in Pennsylvania is sold by “surplus-line” insurers, which are licensed in other states or countries and offer the higher-risk coverage that other companies tend to shy away from.
The state Insurance Department’s new one-stop online shop has links for these and other insurers providing flood coverage. In addition, the page has a link to the NFIP and lists the coverage written by each licensed insurer. For example, some insurers only offer contents coverage for renters, while others offer coverage for both the dwelling and its contents, for homeowners.
“My goal is to make sure Pennsylvanians can find good coverage at affordable prices, and this one-stop website will help homeowners and renters be able to do this,” Miller says.
Recently, Miller testified before a congressional subcommittee in support of proposed federal legislation that would facilitate the entry of additional carriers into the private flood insurance market and provide consumers with additional options. The proposal would also require mortgage companies to accept qualified private insurance in addition to NFIP policies.

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