Just because you haven’t experienced flooding in your home/neighborhood/town yet, it doesn’t mean that it can’t, or won’t, happen. With such unpredictable changes in weather patterns over the past few years many people previously unaffected by flooding have fallen victim to it, and you could too. Flood insurance can help to protect you.
What Is It?
Flooding, in the insurance world, is any time there is an excess of water on land that is normally dry. If this dry place happens to be your home, and you don’t have a specific flood policy, you could be facing thousands of dollars in repairs. Just a couple of inches of water can wreak havoc by ruining personal belongings, weakening and damaging structures, and potentially leading to mold and decay. Many people think of heavy rainfall as the sole cause of flooding, however, melting snow, ruptured riverbanks or dams, and even mudslides can all cause your “dry place” to quickly become a wet and soggy disaster. And your Homeowner’s policy will most likely NOT COVER ANY of the damage!
What Does It Cover?
I’m so glad you asked! A flood policy can cover contents and property damaged by excessive water or mud. Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters.
Can You Give Me An Example?
We have a client who called us recently as his house resides near a water reserve and he wanted to know if his homeowner’s policy would protect his property and everything in it if the dam were to break. OMG noooo, we replied. He promptly purchased a flood policy and now we can all sleep better at night!
We recommend flood insurance to anyone that owns or rents a home or commercial building. Even some of the homes in a “Preferred” flood zone (B, C or X) suffered flooding after Super Storm Sandy, so with policies for those low-risk areas running around $485 for the year, it’s a bargain for your peace of mind!
How Much Does It Cost?
According to NIPR statistics*, from 2008 to 2012 the average residential flood claim amounted to more than $30,000. It is important to note that there is typically a 30-day waiting period before a flood policy goes into effect. A common exception to this requirement is if the property has a mortgage and is in an “A” or “V” flood zone, but carriers will almost always refuse to bind coverage once a Hurricane Watch or Warning for any part of the state has been issued, regardless of where the property is located. So, if you are waiting to hear about approaching disaster before making your flood policy buying decision, chances are you will not be able to get coverage in time, if at all.
But I digress! Back to costs. Policy limits are determined by several factors, including:
- age of building
- home design
- flood zone (i.e. its flood risk)
- deductible you choose and the coverage limits
The maximum limit is what is printed on the declarations page, (usually not more than $250,000 in the Standard Program), minus the policy deductible. There is a separate deductible for Building and a separate deductible for Contents. Clients that had a $5,000 deductible for each ended up with a total claim deductible of $10,000. Limits higher than $250,000 are available on an Excess Flood Policy. Those homes near the shore or a river or lake should have an Excess Flood policy. Contents in a basement are NOT covered, however, coverage is available through a broker.
So, hopefully that has given you an overview on Flood Insurance and why you should have a policy. Like all insurance it is an expense for that just-in-case scenario, but the ramifications of not having it are so much more costly and you have nothing to lose by simply getting a quote! So call us toll-free (855) 678-CEDAR or email us at [email protected].
* http://www.floodsmart.gov/floodsmart/pages/residential_coverage/rc_overview.jsp