When the Water Won't Stop: The New Reality of Flood Insurance in New England

With all the damage we've seen from massive storms that have hit the US in recent years, including some devastating flooding right here in Massachusetts, there are a lot of questions about who, exactly, should get flood insurance. Is it worth it? Bill Martin, CEO of Plymouth Rock Home Assurance, talks with Nichole about the pros and cons, and what you should consider if you're thinking about a policy.

Episode Transcript

Speaker 1 (00:07):
From WBZ News Radio in Boston. This is New England Weekend.
We're each and every week right here, we come together
we talk about all the topics important to you and
the place where you live. Thanks for being with us
again this week, and happy summer to you. I'm Nicole Davis. Now,
with all the damage we've seen from the massive storms
that have hit parts of the US in recent years,

(00:28):
including flooding right here in Massachusetts, there is a lot
of talk around the country about who exactly should be
getting flood insurance. Considering the cost of home ownership right now,
every sense you can save matters. You might be wondering, well,
I'm not really by the water. I don't really live
near a river or anything like that. Is it worth it?
I decided to bring in an expert to talk with

(00:49):
us about all this. Bill Martin is the CEO of
Plymouth Rock Assurance, and Bill, I appreciate your time. I
wonder if you too are hearing from people who say
they don't feel like they need flood insurance because they
don't live near the water.

Speaker 2 (01:02):
Well, what people think is that if the federal government
doesn't require you to buy flood insurance for your mortgage,
because they back many mortgages in the federal government, that
you don't need flood insurance at all. But that kind
of misstates the purpose of the flood insurance program. The
flood insurance program is there to create incentives for communities
to improve their flood protection, not to protect people from

(01:25):
flood so much as to prevent a situation where a
town is repeatedly flooded. That means that you do have
to buy flood insurance if you want flood coverage. You
just don't have to buy it to guarantee your mortgage
in some places and do in others.

Speaker 1 (01:38):
Okay, So then let's talk about the chances of your
home flooding because obviously climate change it's a major impact here.
What are you seeing over there at Plymouth Rock when
it comes to the chances of having to deal with
a big problem like.

Speaker 2 (01:51):
That, Well, sea level rise and title effects have caused
more flooding in coastal areas. But I think most people
don't realize is that there's a great deal of flooding
not in coastal areas, just to tidal rise in water,
excessive rain, a release of water from certain upstream reservoirs

(02:12):
or places where it's actually protected. The failure of a
wall somewhere can create flooding. Sometimes development can concentrate water
flows and create flooding, and you might not find out
until there's a major rainstorm that it has done.

Speaker 1 (02:25):
So, I mean, with all these different factors, why do
you think flood insurance isn't considered to be a standard
component of financial protection at this point?

Speaker 2 (02:35):
Well, it should be. I mean, the truth is, the
insurance industry found it difficult to cover floods seven years
ago or so and began to look for ways to
try and get their risk together into one place so
that everybody gets charged a fair amount. But that required
everybody to buy flood insurance in order to fund it.
And so what's happened is only that people required to

(02:56):
buy it are buying it, and you don't have enough
money for all the flood claims that are coming in
or for the FEMA payments out because of flood. So
it is a little bit of a misnomer that you
don't need it. You do need it, it's just that
the federal program which is meant to flood protection might
not cover you.

Speaker 1 (03:14):
What are the other misconceptions about flood insurance? That you
see people running up against when they're dealing with homeownership
or vehicle ownership or otherwise.

Speaker 2 (03:22):
Well, beyond just the basic idea that your home policy
doesn't cover flood, we're seeing people who are mistaken what
is a flood claim and what is not. So during
a hurricane, much of your damage will come from wind,
and of course your home insurance covers is going to
cover that type of damage. But the actual flooding where
it just rains for a long time, it could because

(03:44):
of a hurricane, or it could have nothing to do
with it. The hurricane is not covered by your home policy.
Somebody just recently quoted an example to me of a
tree falling on a roof. Well, we'll cover the repair
to your roof, But before we cover that repair, if
it rains all day long and flood your house, a
part of the damage underneath might not be covered. So
it depends on your policy in some parts of the damage.

(04:05):
But just to be sure that you are covered, it's
best for you to have the flood coverage added to
your home policy. You have to buy it separately, and
that's where most people miss the opportunities to cover themselves.

Speaker 1 (04:15):
So Bill, when you're looking to go buy flood insurance.
Is there a federal program you should be focusing on,
or is it better to go with a private insurance
company instead. What do you think?

Speaker 2 (04:24):
I think the best option is to compare. The federal
program will be available to everybody, but private programs can
also offer you coverage for things that the federal government excludes,
such as very large claims. I think they cap out
around two hundred fifty thousand. You might want to buy
a million dollars of coverage for your repair or for
a basement, which many flood the federal flood program does
not cover. So I would look around for both private

(04:47):
and National flood insurance program quotes. Most carriers do work
with the National Flood Insurance Program to place coverage concurrent
with their homeowners coverage, but it's up to the customer
to say, hey, you know, I want this, even if
it's not required. If you think about all the things
that can happen to your home, maybe one of the
least likely things is that it's going to burn down.
It's more likely that you might have some sort of
flood event, or you might have some sort of partial loss,

(05:09):
and so paying attention to what perils your policy covers
can really help you figure out what you should and
shouldn't buy.

Speaker 1 (05:15):
What would your advice be to somebody who's maybe a
new homeowner who's not really sure how to navigate all this,
maybe a millennial like myself, or somebody who's just getting
into this.

Speaker 2 (05:24):
Well, you should ask your insurance agent whether or not
they can sell you flood coverage, and if they can't,
go seek to buy it yourself. A lot of times
they will tell you that you don't need flood coverage,
but what they're referring to is that you don't need
it for your mortgage. In my opinion, you do need
flood coverage everywhere, just in case it happens to reiin

(05:45):
in your house floods. Regardless of whether it's required by
the government. It only takes a few inches of flooding
for you to have really significant damage to your house.
You have to tear down the entire wall, even if
only six inches of it has become flooded and got
and we'll start to rot and create mold. So what
damage isn't just homes inundated and over the roof and water.

(06:07):
It's homes with maybe two or three inches and they
actually have to replace the entire walls and all their
first floor bill.

Speaker 1 (06:13):
Thank you so much for the education and the time.
This is really helpful, glad to help. Thanks again so
much for joining us. I hope you have a great
start to the summer this weekend, and please don't forget
to join us again next week for another edition of
the show. I'm Nicole Davis from WBZ News Radio on iHeartRadio.