Duplicate Flood Insurance Policies Failure To Refund Zed Truong asked 3 months ago
Duplicate Flood Insurance Policies Failure To Refund


First of all, thank you in advance for your help regarding this matter. I’ve been fighting this for about 2 months now, and any advice is greatly appreciated. To sum up, in 2022, I contacted my insurance agent to cancel flood insurance for a current policy I have with the NFIP, telling her that I’ve gotten a better deal with a private flood insurance company with the same amount of coverage. The agent responds with “policy will be cancelled upon non-repay”. I took this as everything is all good, and made an upfront payment to the private flood insurance company, assuming they would notify the mortgage company, since my flood insurance is currently being escrowed. I did also call up the mortgage company telling them I was switching flood insurance, but do not recall sending them any documents.

Two years later, I realized that the mortgage company is still making payments to the NFIP policy that was supposed to be cancelled, and this payment comes out of my escrow. I managed to get a refund for the year 2023-2024, but could not get a refund for 2022-2023, since they told me it was their company policy that they can only refund this year’s effective flood insurance premium. Technically, I paid 2.2k for a duplicate policy.

I tried to reason with my insurance agent with the NFIP, saying she should have notified the NFIP I wanted to cancel so a formal cancellation process could have occurred, thus preventing them from billing my mortgage company. She told me since the flood insurance was required by my mortgage company, she couldn’t cancel my policy. She also stated I should have known that the policy would not be cancelled when she notes that the policy will be cancelled upon “non-repay”, meaning that my private flood insurance should have notified my mortgage company that they will be the new provider, if I wanted the policy to be cancelled.

I then called up the private flood insurance company, and they said they could not refund me due to the same reason of it being the past year’s policy, and that my agent should have cancelled it when I asked. I called my mortgage company and they said the same, that when I wanted to cancel the NFIP flood insurance, my agent should have cancelled it. I called my mortgage company, and they also agreed with the notion.

So my question is, how can I get my refund, and if it was my fault, the agent’s fault, the private flood insurance company’s fault, or someone else’s and what advice would you have?

2 Answers
Amy Bach Amy Bach Staff answered 1 month ago

Hi Zed, In addition to what our volunteer expert suggests, try contacting the NFIP’s Flood Insurance Advocate directly via https://www.fema.gov/flood-insurance/advocate. They may tell you your remedy is with the lender that continued paying the premiums.

Karl Susman Karl Susman Expert answered 1 month ago

Hi Zed,

Ok a few things to note. First, NFIP policies always run their term, so they cannot be cancelled mid-term. Now it sounds to me as if you had the NFIP policy impounded and the mortgagee was paying the bill, and you purchased a new policy from a private insurer and were paying it yourself. (Please correct if I missed something there.) The agent was right and wrong, policies will cancel if not paid, so her presumption that you would not pay and the policy would expire and end is correct. However, in this situation, since the lender was paying the bills, the policy did not end since it was paid for. The agent likely missed that aspect when she said just let it expire etc. So what to do.

Flood insurance policies written with NIFP are unique insofar as they don’t care about duplicate coverage; once it’s paid it is in effect. Claims handling is another story. So it may be challenging to get them to refund during that period of time you had two policies since from their perspective, if there was a claim they would have paid. I would suggest you do two things in this order –

Contact NIFP directly at (877) 366-2627. Tell them that you requested cancellation and your agent neglected to submit your request.

If you are unable to have this solve the problem, contact the California Department of Insurance Consumer helpline at (800) 927-4357.

Let me know if I can do anything else to help?

Karl Susman