Our mortgage is paid off, but we have continued to get flood insurance. A couple of years ago, we started to get two bills for the same amount … one seemed to come from FEMA, and one seemed to be generated from our home insurer. I am guessing the private insurer is making some kind of commission if it sells me the insurance rather than the govt? I’ve never double-paid, but I’m curious whether there is a real difference in “how” I get this coverage. I read this link but am still confused.
TIA
Without seeing the policies there’s no way to tell, but my guess is that one policy is for flood and one is for homeowner’s. Homeowner’s is the traditional policy that most people have and covers things like wind damage but not flooding. So you need both to cover you in case of flood.
Flood insurance can only be purchased through the federal government. If the bills are the same amount, whether the home insurer gets a broker’s fee is up to the government. Maybe the insurer is just making sure you are carrying the same coverage as you had before paying off your mortgage.
Actually, I have flood policies from several different companies. There is also primary and excess coverage, for losses beyond the $500,000 max covered by the policy (HI has expensive real estate and buildings).
I’d call the companies listed on the policy and see what you’re paying for before paying any more premiums. Generally, you can only have one primary policy effective on a piece of property at a time.