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How to Get a Low-Cost, Preferred Risk Flood Insurance Policy
The Federal Emergency Management Agency (FEMA) created Preferred
Risk Policies (PRPs) to reduce the cost of flood insurance for
homes and businesses in areas with a moderate risk of flooding. Most Sacramento property owners who have been removed from
the Federal flood insurance requirement, or who have moved into areas where flood insurance is no longer required, now qualify for a PRP1.
Click here to view a map that shows, in green, the areas that generally are eligible for Preferred Risk flood insurance.
PREFERRED RISK POLICIES
Click here to view samples of Preferred Risk flood insurance rates
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IN BRIEF: How to Get a Low-Cost, Preferred Risk Flood Insurance Policy
- Contact Your Insurance Agent. Tell your agent that you
would like to apply for a low-cost, Preferred Risk flood
insurance policy. If you currently carry a Standard flood insurance policy, your agent will not automatically switch you to a low-cost PRP. You must contact your agent to obtain flood insurance savings. (For most people, this is the same agent who writes their Homeowners insurance.)
- Ask Your Agent If He or She Requires a Copy of the Letter of Map Revision that Removed Your Area from the Federal Flood Insurance Requirement. Agents may use this document to check your eligibility for a PRP. Skip this step if your property is located in the Natomas/North Area.
Click here to view the major Letters of Map Revision for the Sacramento region.
- If You Currently Carry a Standard Flood Insurance Policy, With Your Agent's Help, Fill Out a Preferred Risk Policy Application and Apply for a Flood Insurance Premium Refund. Most property owners who purchase a PRP will receive a refund of their current flood insurance premium. A portion of this refund can be used to buy the PRP.
If you do not currently carry flood insurance, simply call your insurance agent to find out if you qualify for a Preferred Risk Policy. If you do qualify, meet with your agent to fill out the short PRP application. (Again, for most people, this is the same agent who handles their Homeowners insurance.)
Remember to make copies of all documents you submit to your agent.
IN DETAIL: How to Get a Low-Cost, Preferred Risk Flood
Insurance Policy
An Example:
Ann was required to carry flood insurance when she purchased her Land Park home more than ten years ago. Her current policy protects her home for $250,000 and her belongings for $100,000. This Standard policy costs $932 a year. Ann's policy term begins on 1/3/2006 and expires on 1/3/2007.
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More Than One Way to Get a Low-Cost Preferred Risk Policy (PRP)
If you currently carry regular, or Standard, flood insurance, your agent may choose to have you cancel this policy before he or she applies on your behalf for a Preferred Risk Policy. This is another way to write a PRP and should not affect the amount of your premium refund. If your agent takes this route, please follow the cancellation instructions in How to Cancel Your Flood Insurance.
If your agent is unfamiliar with Preferred Risk flood insurance, you might suggest that your agent contact his or her company's underwriting or servicing department for instructions on how to write a PRP.
Alternately, you might encourage your agent view "Help for Insurance Agents: How to Write a Preferred Risk Policy."
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Ann learns that her home was released from the Federal flood insurance requirement in early 2005.
Concerned about the on-going flood risk to her property, Ann contacts her insurance agent and asks to purchase a low-cost Preferred Risk Policy. (To obtain a Preferred Risk Policy, most people contact the same agent who handles their Homeowners insurance.)
Ann offers to furnish her agent with a copy of the Letter of Map Revision that removed her property from the Federal flood insurance requirement.
Click here if your property is located in the Natomas/North Area.
The agent does not require the Letter of Map Revision but finds that Ann qualifies for a PRP and for a refund of her current flood insurance premium.
Ann's agent provides her with a PRP application. Ann completes this short application and switches to a PRP. Ann's PRP will give her the same $250,000 (home)/ $100,000 (contents) coverage as her Standard policy. But the PRP will cost $317 a year, or $615 less than her old Standard insurance.
Ann's agent may apply $317 of Ann's premium refund to purchase the Preferred Risk Policy. In this case, Ann will not have to spend any money "out-of-pocket" to buy the PRP. Approximately 90 days after Ann purchases this policy, she will receive a check for a full-year refund of her Standard flood insurance ($932), minus the cost of her new PRP ($317). In this example, Ann's refund will be $615.
If the agent uses this process to switch Ann to a PRP, Ann's new Preferred Risk Policy will share the same 1/3/2006 start date as her old Standard policy. So, on 1/3/2007, Ann will need to renew her flood insurance but at the significantly lower Preferred Risk Policy rate.
This Standard-to-Preferred Risk Policy conversion process may differ if you escrow your flood insurance through an impound account set up with your lender. For questions about this process, please contact your insurance agent and, if necessary, your lender’s Insurance Compliance Department.
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FOR MORE INFORMATION
- Visit the National Flood Insurance Program website at www.floodsmart.gov.
- If your property is located in the City of Sacramento, call the City's Floodplain
Information Line at (916) 808-5061.
- If your property is located in the unincorporated area of Sacramento County, call the County’s Flood Zone Determination Hotline at (916) 874-7517.
Please note: Automated phone systems answer both the City and County numbers shown above. When you call these numbers, a recorded message will ask you to leave information that will help City or County staff to check the current flood risk to your property. In most cases, City and County staff can check the flood risk to your property and get back to you within 48 hours. However, high caller volume may delay their response to your request.
DISCLAIMER: The Federal Emergency Management Agency (FEMA) administers the National Flood Insurance Program. The Sacramento Area Flood Control Agency (SAFCA) is not part of FEMA. SAFCA does not set or enforce Federal flood insurance rules, procedures or policies. Nor does SAFCA receive a fiduciary benefit from the sale of any flood insurance product.
1 Property must be located in
a B, C or X flood zone to qualify for a PRP. In addition, property
with a flood loss history may not qualify for a PRP. Your agent
will determine whether or not your property meets Federal PRP eligibility
standards.
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