General Insurance
Floods can be unpredictable and happen anywhere. The weather that causes flooding can strike in almost every part of the country, and often comes without warning. Many people think they are safe from flood damage, but in the aftermath of incidents like Hurricane Katrina and other floods, home and business owners have learned the hard lesson that their other policies do not protect against damage from floods. Flood insurance coverage is needed to protect these people and allow them to have peace of mind that they will be restored to their original state and be able to continue their life with the same quality of living after a flood occurs.
What is it?
Flood insurance is a form a property insurance that covers for damages caused by flooding. These policies cover for damages to a building (home or business) and outlying structures, and also personal property. The coverage is underwritten through the government through the National Flood Insurance Program, and can be purchased directly from the government or from an insurance agent. In order for the NFIP to provide coverage, the community must have made measures to reduce the possibility of damage from a flood. The limits offered under this program are up at $250,000 for a home or condo, and $100,000 in personal property. For business flood policies the maximum limits are $500,000 in building coverage and $500,000 for business property. This flood insurance coverage is required for homes that have a mortgage that are on high risk zones for floods.
How does it work?
If a flood occurs that damages one or more properties (one of these being yours) or damages more than two acres on your property, a claim could be made under a person’s flood insurance coverage. There is most often a 30 day waiting period after the policy is purchased for coverage to begin, but if a flood occurs anytime after that, the coverage would be good as long as payments had been made. If a flood were to occur that meets these guidelines, the policy would pay the total amount of damage or value of the home or business structure, up to the policy limits. It would also pay for damage to personal effects such as clothes, furniture, appliances and business inventory.
How much do I need?
If an individual’s home is valued at higher than $250,000 or a business owner’s structure is valued higher than $500,000, they may want to consult an agent for excess flood insurance coverage. It is also possible that you will not need to purchase the highest limit if your home is not valued at that amount, as your policy will only pay your home’s value. These policies are generally inexpensive compared to other forms of insurance, so all home and business owners should consider having these policies even if they are located in low risk zones, as floods can occur anywhere. It is also possible to purchase a contents only, or building only policy, so landlords and renters can also carry the best flood insurance coverage for them.
Expert Tips and Info
If one would like to evaluate their risk for a flood, they can use the NFIP website to gain information about their risk level. They can also gain information there about possible price brackets for different kinds of policies. If you have a flood and your limits were too low, you can still be reviewed for government aid, however it may be provided at a reduced amount.