Episode Description
RE: Real Estate Podcast
Show Notes – Episode 78
Flood Insurance & Risk Rating 2.0: What South Louisiana Buyers Must Know | RE: Real Estate Podcast
| Cold Open “Here’s something that catches buyers off guard every single week in this market. The flood insurance number in the listing – that’s the seller’s number, not yours. If that policy transfers to you, great. But if it doesn’t, or if there’s been any lapse in coverage, you’re starting a brand new policy at today’s full rate. And that difference can be significant.” – Clint Galliano
Episode Overview
Flood insurance in South Louisiana can make or break a transaction. Clint and Ben break down FEMA’s Risk Rating 2.0, why it’s a poor fit for Lafourche and Terrebonne Parishes, and what buyers, sellers, and investors need to know before signing. The goal: no post-closing surprises.
In This Episode
• What Risk Rating 2.0 replaced and why it changed
• Why South Louisiana’s distributary system doesn’t fit FEMA’s tributary model
• How levee systems go uncredited under the new methodology
• Premium increases: the 18% cap, ~20–21% real-world impact, and the 2037 horizon
• Grandfathering – what survived and what didn’t
• Policy transfer: why not every carrier will allow it
• Private flood insurance vs. NFIP
• Flood-specific due diligence checklist
• How first-time buyers, move-up buyers, and investors should each approach flood insurance
Key Topics
The Old System vs. Risk Rating 2.0
Pre-2021 NFIP premiums were based on flood zone and elevation. Risk Rating 2.0 replaced that with property-specific scores from catastrophe models and a proprietary algorithm. Zone designation still triggers lender requirements but no longer sets the premium. NFIP building coverage remains capped at $250,000.
Why It’s a Poor Fit for South Louisiana
The models were built for tributary flooding, where water concentrates upstream. South Louisiana is distributary – water flows outward through bayous and marshes. The model also fails to credit levee infrastructure that has kept most of Terrebonne and Lafourche from flooding in decades.
Premiums & the 2037 Horizon
Annual increases are capped at 18% but run ~20–21% with fees. Full actuarial pricing is estimated by 2037. A new policy skips the phase-in and starts at today’s full rate.
Grandfathering & Policy Transfer
Risk Rating 2.0 largely eliminated grandfathering. A new owner can inherit a policy rate only if it transfers without lapse – and not all carriers will allow a transfer. Ask early in due diligence.
What Buyers Can and Can’t Do
You can’t shop NFIP for a better rate. You can get a flood estimate before writing an offer, ask whether the policy has lapsed, request five years of renewal documents, and commission an elevation certificate. A high quote is grounds for renegotiation. Sometimes the premium simply kills the deal.
Notable Quotes
| “The flood insurance number in the listing – that’s the seller’s number, not yours.” – Clint Galliano “Don’t make any assumptions when it comes to flood insurance.” – Ben Harang “This is one of the most consistent sources of post-closing surprise in South Louisiana real estate right now.” – Clint Galliano “The right team costs the same as the wrong team. The difference shows up in what they know before you sign.” – Ben Harang
Three Key Takeaways
| 1. Get the flood insurance quote before the offer. A 15-minute call to a local NFIP agent is the single highest-leverage action you can take. 2. The seller’s rate is not your rate. A lapsed policy means starting at today’s full rate. Never budget from a listing or disclosure premium. 3. Work with people who know the specific market. Parish flood maps, FIRM panels, and policy transfer rules are not things you can Google.
Resources Mentioned
FEMA Risk Rating 2.0 fema.gov/flood-insurance/risk-rating-2-0
Flood Map Lookup msc.fema.gov/portal/home
NFIP / FloodSmart floodsmart.gov
Elevation Certificate Guide fema.gov/media-library-data/20130726-1914-25045-9214/elevation_certificates.pdf
Ready to Navigate Flood Insurance on Your Next Transaction?
| Reach out to Clint or Ben for a personalized consultation before your next transaction. Clint Galliano, REALTOR® | clintgalliano.kw.com | clintgallianoreviews.com Ben Harang, REALTOR® | benharang.kw.com
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Your Hosts
| Clint Galliano, REALTOR® South Louisiana Home Group Keller Williams Realty Bayou Partners VA Loan Specialist | Seller Representation | Investor Services Website: clintgalliano.kw.com Reviews: clintgallianoreviews.com | Ben Harang, REALTOR® Keller Williams Realty Bayou Partners Houma–Thibodaux, Louisiana Land, New Construction & Long-Tenured Market Expertise Website: benharang.kw.com
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