The Reformed Deacon
The Reformed Deacon is an interview and discussion podcast created by the Orthodox Presbyterian Church Committee on Diaconal Ministries. The Reformed Deacon exists to strengthen and encourage the brotherhood of reformed deacons in their God-given role of serving the local church. We hope you'll find this podcast to be helpful to you as you serve the Lord in your church. For more information about the OPC Committee on Diaconal Ministries, go to our website: OPCCDM.org. Contact us: mail@thereformeddeacon.org.
The Reformed Deacon
Flood Insurance
In this episode, host Peter Haines, elder at Concho Valley OPC in Concho Valley, AZ, leads a discussion with Brian Tilton, deacon at Trinity OPC in Hatboro, PA, and co-owner of Millham Companies, a personal and business insurance firm in Pennsylvania. Together, they explore the topic of flood insurance—its importance, how it works, and its role in our responsibility as stewards of what God has entrusted to us. They also discuss how deacons can collaborate with congregants to help them make informed decisions about the relevance of flood insurance for their families. We hope this conversation will serve as a valuable resource, particularly for deacons as they assist church families in evaluating their budgets.
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So, deacons, if they do face these tragedies, where they're helping those victims who have flooded, you show an extra measure of grace and care for them as they get through the traumatic event Welcome to the Reformed Deacon a casual conversation with topics specifically designed to help local Reformed deacons.
Speaker 2:There are nearly a thousand deacons in the OPC alone, so let's take this opportunity to learn from and encourage one another. We're so glad you could join us. Let's jump into our next episode.
Speaker 3:Hi, my name is Peter Haynes. I live in the mountains of northern Arizona, attend Concho Valley Orthodox Presbyterian Church and, by God's grace, I serve as an elder there, as well as serving on the OPC Committee on Diakla Ministries. You probably recall that back in July I spoke with David Drake and Chris Lennon about personal insurance. If you want to check it out, it is Season 3, episode 16. This episode is a sort of related discussion. Today we're tackling flood insurance, a topic that often feels a bit distant until it's not. We'll tackle why it's important, how it works and what it means for our responsibility as stewards of what God has entrusted to us, and how deacons can work with congregants to wisely decide on its relevance to them. I think this discussion could be a particularly good resource for deacons as they work with church families through budget evaluations.
Speaker 3:I'll be talking with Brian Tilton about flood insurance. Brian is the co-owner of Milham Companies, a personal and business insurance company in Pennsylvania. Brian serves as a deacon at Trinity OPC in Hatboro, pennsylvania. Hi, brian, it seems like flood insurance is one of those things that a lot of laymen get wrong. There's popular misconceptions out there about who can get it and who can't. Could you start by just simply clearing up any of what, in your experience, are a few misconceptions. So we're all on the same page.
Speaker 1:Yeah, I'd be happy to do that, peter. I've been in the insurance industry for over 40 years, so I have some experience along these lines and served as a deacon for over 20 years at Trinity Church in Hatboro. Flood insurance is a bit of a mystery to most people. Everybody knows they need homeowner's insurance. Everybody knows they need auto insurance.
Speaker 1:Flood insurance is one of those things that people put on the back burner. They think it's never going to happen to them. It's usually not required unless the mortgage company requires it for settlement. So a lot of people opt not to get it, hoping that nothing happens to them. So one of the misconceptions is that oh, I have homeowner's insurance, therefore my homeowner's policy will cover if my house gets flooded. Well, that's not true. All homeowner's policies exclude flooding. Flooding defined as rising waters, overflowing creeks, overflowing rivers, a lot of rain in a short period of time that creates flooding. Homeowner's policies are not designed to cover that at all. So that's a misconception. If you want flood insurance, you need to purchase a separate flood insurance policy. You can get a little bit of extra water protection coverage under your homeowner's policy, for instance water backup coverage for a finished basement, but you cannot buy flood insurance from a homeowner's insurance company. It's through the National Flood Insurance Program, so that is a mystery to a lot of people. But today we'll try to clear up some things about that.
Speaker 3:So you mentioned that it's not a part of homeowner's insurance, that it's a separate thing. Is it only for homeowners, or can renters also get flood insurance?
Speaker 1:Generally speaking, a homeowner will buy this coverage because the critical coverage is the house. If your house floods and becomes damaged or inundated with water, it can cause a lot of damage. If you simply have contents, oftentimes you can elevate your contents to a higher level or you don't own that much in the way of contents. So it's more critical to have flood insurance. If you own a building, own the house. But yes, renters can purchase flood insurance at a fairly low cost, but it's not as common to do that.
Speaker 3:I think you mentioned, it's not necessarily required by law to have flood insurance, but some mortgages will require it. Is this if you live in a flood zone or a typical area, what other things would make us have to carry it?
Speaker 1:That is correct. So if you're in a flood zone and we can help determine if you're in a flood zone, but if you're in a flood zone you will not get a mortgage without flood insurance because a mortgage company will make that a requirement to provide the loan. They do not want a house that they're providing a mortgage on to be swept away in a flood and the homeowner not to have any coverage, so they will mandate it at the time of settlement or at the time you take out the loan. So the way to determine if you have risk for flood insurance at least higher risk you would go to a website called floodsmartgov.
Speaker 1:Floodsmartgov, that is a national website that indicates your level of risk based on your address. So it will determine historic flood areas, flood locations, it will often determine elevation and it will indicate whether getting flood insurance is a good idea for you or not. So floodsmartgov, enter your address for you or not. So floodsmartgov, enter your address. That will help determine the risk. You'll be given a different grading based on where you live, and then they do drill down on that further by getting exact elevation measurements how high above sea level is your house? How likely is your house to have a flood, so be sure to write down that web address if you're curious as to what your risk is. That's a very good resource.
Speaker 3:So some people might believe that because they can rely on FEMA in a flood, that they don't need any kind of extra insurances. What would you say to that?
Speaker 1:Well, that's how a lot of people think and, in reality, how it often works. So flood insurance is not purchased very often. It is optional. Again, most people feel they're not in a high flood risk area, so they don't buy it. And then all of a sudden, rains will come in a particular area, get stalled out over that area, creating massive flooding and leaving people with a lot of damage. So it is important to buy the coverage. I think of the recent flooding in North Carolina. People in North Carolina would not have anticipated that a hurricane would get stalled over the mountains, causing flooding downstream in the foothills of the mountains.
Speaker 3:So that's a situation where it would be important to get that type of coverage. Is there anything else that North Carolina residents could have done ahead of time, besides flood insurance, to help protect them from the disaster?
Speaker 1:that came, of course, in hindsight, good if everybody had flood insurance. But going into that, no one was predicting that level of rain from a hurricane to come that far north and do that much damage, so it's very difficult to plan ahead for anything like that. So in general you can provide landscape grading that tends to keep drainage water away from your home, but these floods come so quickly that you don't have time to react typically Put up sandbags. So there's not a lot in that situation that a prudent person would have done differently based on the low risk. Now, if they're along a creek and along a drainage area, you perhaps could have anticipated some flooding and taken some precaution. But that is a unique and different situation. That is not what we normally see for floods. Usually we see them in low-lying areas, near the coast or near a river.
Speaker 3:The question is kind of about that in a broad way, several questions in the same question. The average homeowner may think that flood insurance only applies to those who live near water. They would say that's a high-risk area. But floods don't always respect that, like we saw in North Carolina. Heavy rain, overflowing rivers, hurricanes and even snow melt Essentially any water that inundates land that's normally dry. Does that mean everyone should have flood insurance? And then wouldn't my insurance provider have told me, hey, you should have flood insurance if I need it?
Speaker 1:Yes. So it'd be great if everybody just paid in flood insurance. It would lower the cost. But they don't want to make it 100% mandatory, so they have not gone to that step yet. So therefore, you have a few people buying flood insurance, which tends to make it more expensive and there's less money in the pool. But in terms of risk, if you're in a coastal location I think of Florida, new Jersey coast, other coastal locations you're at a much higher risk for flooding because hurricanes can come up the coast, can raise the water level with water surges and create damage along the coast. But also lower level elevations are at risk too. So if you're near a river and you happen to be in a lower elevation, those are the higher risk areas. And you mentioned earlier about FEMA.
Speaker 1:If you don't buy insurance, you will get some coverage, typically from FEMA. The problem with FEMA is the delays in payment. You have to apply for coverage. You're not sure what you'll get paid. You're not sure how long it will take to get paid. So, again, if you're in a risk area coastal risk area, low elevation area you will want to buy the coverage because the coverage will work better than the FEMA answer. But in reality a lot of people don't buy the flood insurance, so FEMA has to step in to help these people who have not decided to buy their insurance ahead of time. Generally speaking, snowmelt is not going to be an issue unless you have massive snow accumulation at higher levels and you live at lower levels in the path of potential snow melt. But usually you're not going to get major flooding in a typical neighborhood from snow melt. It's going to be related to massive accumulations of snow.
Speaker 3:We've had a little bit here in Arizona. I live at elevation I'm at 7,000 feet and sometimes if we have a good winter and we get a good snowpack and then suddenly we get a nice warm time and then we call them monsoons it's really funny to me. We get a heavy rain, so it'll mix like the end of April and May We'll get the snow melting while it's raining at 7 000 feet. I've had to go around a different street because there's a three foot river across the road.
Speaker 3:That wasn't there before yeah it doesn't happen often, but every once in a while, so it's even at 7 000 foot elevation.
Speaker 1:Flooding is something that can happen because of our snow yeah, because of the accumulation up in the mountains it can be a torrent of melted water. That is correct Melted snow.
Speaker 3:Another question is is flood insurance one size fits all or are there degrees of coverage?
Speaker 1:So it's based on a number of factors. One, the value of the home. If you have a small home and you don't need much coverage, it's going to be a lot less expensive than a huge home that needs more coverage. If you're in a non-flood location, that rate's going to be fairly inexpensive. If you're in a high-risk flood location, that rate's going to be more expensive. So there are factors like that that go into coverage. You can choose a certain amount of coverage for the building. You're not likely to have a total loss to the house in a flood.
Speaker 1:A home catches on fire can burn down to the ground. A home that's damaged by flood typically is a flood that comes through but does not remove the structure from its footings. It just creates a lot of damage. So often you can buy flood insurance but maybe cut back on the coverage and not insure the building to 100%, but insure it up to the limit that you think would be damaged if you did have a serious flood. So it's not a one-size-fits-all. It's very specifically rated, based on location, zip code, geography, elevation, level of coverage and then finally, the deductible you choose. You can choose anywhere from $1,000 deductible to a $10,000 deductible and you might think, well, I don't have much risk, but I want to have some flood insurance. Might think, well, I don't have much risk, but I want to have some flood insurance. Therefore, I'll get a quote, but use a higher deductible of $5,000 or maybe $10,000. So it's there for catastrophe, but you're not going to submit a smaller type claim.
Speaker 3:So regarding costs, would it be possible to give us a little bit of a specific? So say, I have a friend who lives in a three-bedroom, two-bath home along the Schuylkill River. Approximately how much would they be expecting to have flood coverage of some type?
Speaker 1:Yeah, we can work on that. So along the river I think of the Schuylkill River, I think of Delaware River these are prone to chronic flooding. If you get a lot of rain you will have the rivers overflow their banks. So if you have a home along the river that's subject to flooding, that's going to be fairly expensive. If you decide to get flood insurance and you are in another location in Delaware County or Bucks County or somewhere far away from typical flooding, it'll be much less expensive. So if you're getting low amounts of coverage in a non-risk area, you may be paying $500 to $800 a year for your flood insurance coverage. That's considerable, a low rate. If you are in a higher risk area, you could be paying upwards of $2,000 to $3,000 a year for your insurance. So it is a big cost, particularly if you're in an area prone to flooding. So price ranges that I've seen I've seen the lowest $600 and the highest around $8,000. So that's the range. It does vary quite a bit based on risk and based on elevation. That's very helpful, thank you.
Speaker 3:So, Brian, what would you say to a homeowner to determine if it's worth it? Is it a mathematical thing? Is it a feeling of comfort thing? Is it both? What do you do to decide?
Speaker 1:Well, that's a difficult decision and a personal decision. Some people have a higher tolerance for risk. Others want to ensure every scenario. So the first step would be to discuss it with a knowledgeable agent. You probably already have an agent that handles your homeowners and auto insurance. Have a conversation with them. Do they feel, based on your location, which they should be familiar with it warrants paying for flood insurance? So that would be the first step Talk to a knowledgeable agent.
Speaker 1:Go to that website I talked about and determine your own level of risk. If you're at a higher elevation and away from water flooding areas, you may see all these reports on TV of homes that are flooded and get quite upset and worried, but in reality, statistically, your home is not likely to be affected by flood. So determine your level of risk based on rating factors and then finally get a sample quote. If you get a quote and find it's $800 premium and you think that's a reasonable premium, to give you some peace of mind about that, it might make sense for you to go out and buy the coverage. If you find out that it's quite expensive, you know, maybe you want to make other considerations or choose a higher deductible. So actually get a quote so you know what dollars you're talking about, and that will help you make your decision for you. Thank, you.
Speaker 3:That's great advice. So some deacons and others in the church might be tempted to think that a homeowner whose home was flooded but didn't have insurance was being negligent. Is there any truth to this notion that? How would you, as an OPC deacon but also an expert in this matter, encourage deacons to view those in our church who are victims of significant floods without proper coverage?
Speaker 1:They are to give good advice to their members in their church. They certainly are not to be judgmental in stating that well, you should have anticipate this rare storm that might come through to do that type of damage, and human nature might be to procrastinate a little bit. There's so many things to spend money on. You're spending a lot these days on homeowners insurance. You're spending a lot on auto insurance. You know it is difficult to come up with another $1,000 or $2,000 for flood insurance if you don't perceive you have the risk. So, deacons, if they do face these tragedies where they're helping those victims who have been flooded, you show an extra measure of grace and care for them as they get through the traumatic event.
Speaker 1:To have your home flood is devastating. It takes a while to clean it up. It takes a lot of expense to clean it up. A lot of times neighborhoods will rally together, but certainly the church should be there as a backup to provide assurance to the person who has had a flood and physical assistance if rebuilding is needed. So one thing you know some of these members wondering if they should have flood insurance. They should talk to the neighbors, you know, have they ever experienced a flood in the neighborhood and again talk to the agent to determine whether it's worth doing that. But in reality, even with all the facts and statistics ahead of time, a lot of people don't make the decision to buy flood insurance. So we should have an extra measure of grace for those facing these tragedies without proper coverage.
Speaker 3:So, as we wrap up this episode, for someone who's listening today, who might be feeling overwhelmed by this information, what than one really.
Speaker 1:So first go to floodsmartgov, determine your risk, get knowledge, read about flood insurance, what it covers, what it doesn't cover. If you're merely concerned about your basement flooding, you can buy sump pump backup coverage. You can buy drainage backup coverage for $100 under your homeowner's policy. That may satisfy your biggest risk a flooded basement. But if you are more concerned about the broader, more serious flooding, then again go to floodsmartgov. Determine your risk, discuss witha knowledgeable agent, which we've already talked about.
Speaker 1:Go around to your neighborhood and discuss what are your neighbors doing? You're likely to find your neighbors aren't buying this flood insurance either, but maybe discussion should be held on a neighborhood level to determine, you know, whether there's some wisdom in pursuing these quotes. And then, finally, as deacons in the church, they should be familiar with the geography that they're in. Is it a high-risk location? If so, they should meet with members of the congregation to help discuss these issues. Insurance more broadly property casualty insurance is a broad topic that the deacons should cover when they meet with their members. That the deacons should cover when they meet with their members. And then, more specifically, flood insurance, particularly when we see all these flood events on TV, including floods that affect the OPC denomination, including floods that affect members of our local churches. We want to be proactive in planning and thinking ahead of time wherever we can.
Speaker 3:Well, thank you, brian, for joining me today to talk about this important yet somewhat complex subject. Hearing this has been helpful to me and I hope it's been just as beneficial to our listeners. God bless.
Speaker 2:Thank you, Peter. Thanks for joining us. Go to our website, thereformedeaconorg. There you will find all our episodes, program notes and other helpful resources, and please make plans to join us again for another episode of the Reform Deacon Podcast.
