Facts About Flood Insurance

Website: Insurance Information Institute

Material Excerpted From: iii.org – Flood Insurance

The risk of flood damage or loss

According to the Federal Emergency Management Agency (FEMA) floods, including inland flooding, flash floods and flooding from seasonal storms—occur in every region of the United States. In fact, 90 percent of all natural disasters in the U.S. involve some type of flooding.

If you’re moving into a new home, apartment or business location, ask your mortgage lender, your local officials or your Hometown Insurance flood certified licensed agent if the location has been known to flood or is in a flood zone.

Even if you do not live in a high-risk flood zone, you’re in some danger of loss from a flood, because 20 percent of all flood claims are filed in low-to-moderate flood risk areas. That means, you should know how to prepare for the possibility of a flood, know your flood insurance options and obtain adequate coverage.

Flood insurance basics

Be aware, for the Atlantic region, hurricane season starts June 1…and with hurricanes, often comes flooding!

Insuring yourself against a flood is a little different from other insurance policies.

• Floods are not covered under standard homeowners and renters policies. Occasionally a homeowners insurance company will offer some measure of flood coverage but it does come with an extra cost and add-on or rider to the policy. Only specific flood coverage or a flood insurance policy will cover home flood related losses.

• Most flood insurance is administered through the National Flood Insurance Program (NFIP) with some states offering private flood insurance. Homeowners, renters and businesses can purchase flood policies from an agent. Federal flood insurance is available where the local government has adopted adequate flood plain management regulations under the NFIP—and many communities participate in the program.

• Flood insurance covers direct physical losses from floods and losses resulting from flood related erosion caused by waves or currents of water exceeding anticipated cyclical levels and accompanied by a severe storm, flash flood, abnormal tide surge or a similar situation that results in flooding.

• Flood insurance coverage for the structure and contents of the home are sold separately. Buildings are covered for replacement cost, but coverage for personal property is typically available on an actual cash value basis.

• The maximum NFIP flood insurance coverage amount is $250,000 for the structure of the home and $100,000 for the contents of the home. (“Excess” coverage over and above the maximums that are available from NFIP is offered by private insurers.)

• Flood losses for cars are covered under the optional, comprehensive portion of a standard automobile insurance policy.

• Commercial flood insurance is available from the NFIP; it provides up to $500,000 of coverage for your building and up to $500,000 for its contents. You can also purchase what’s called “excess” insurance coverage to rebuild properties valued above those limits.

Buying flood insurance

When buying flood insurance, you should know that:

• It’s easy to purchase – NFIP flood insurance policies can be purchased directly from an insurance professional. Nearly 100 insurance companies write and service NFIP policies. And in some states, private flood insurance offers additional types of policies.

• NFIP Flood requires a 30 day waiting period before the policy takes effect, so don’t wait until the last minute to purchase.

• NFIP can be augmented with “excess” insurance – The NFIP policy maximums are often inadequate to fully cover some assets so a growing number of private insurers have begun offering excess flood policies, intended to provide water damage protection to homeowners over and above the coverage provided by the NFIP policies. Some private insurers are also starting to offer “first dollar” flood policies.

What if I don’t have flood insurance and there’s a flood?

Having a flood insurance policy is way to protect your assets most fully from the cost of flood damages and loss.

Without insurance, relief from floods primarily comes in the form of loans. If your community is declared a disaster area, no-interest or low-interest loans are often made available by the federal government (FEMA) as part of the recovery effort. However, these loans must be paid back, which means you are still liable for the entire cost of your damages or losses. Flood insurance is often an affordable way to make your home whole in the event of a flood.

Your coverage matters to us, call us today for a flood quote at 1-800-568-SAVE (7283) or email us at: service@hometowninsurance.com. Hometown is here for you!  

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