You’ve heard about flood insurance before, but figured you were fine without it. After all, you didn’t live right on the river, you’re blocks away from the water in fact. Then one spring morning after a couple of days of heavy rain, you look out the window and you can see water from your front door. The water has risen higher than it ever has before, and in a couple of hours it will be at your doorstep. You contact your insurance agent timidly to ask what coverage your homeowners insurance would provide, and you hear those dreaded words “I’m sorry, but you don’t have any coverage at all.”
Contrary to popular belief, nothing covers losses due to a flood other than flood insurance. Not home insurance, business insurance, or any other type of insurance you might have thought would provide coverage.
While in this example the structure is located in a riverside community, you don’t necessarily need to live near the water for your home or business to be at risk for flooding. Just about any home could be subject to flooding, as a variety of situations can cause water to seep into a building.
What Flood Insurance Does & Doesn’t Cover
Flood insurance provides coverage for a building and its contents. That could include all or parts of the structure, from the foundation to the walls, and the personal property you may have in the building, such as furniture, appliances and electronics. Unfortunately, flood insurance will not offer protection for the land, though. So if your grass dies or trees are uprooted, the cost to repair the damage will not be covered.
Flood insurance is also particular about the causes of flood damage that it will cover. For example, if flood damage happens to a structure as a result of a sewer or septic back up caused by natural flooding, it will likely be covered by the policy. If a sewer backs up because an inappropriate item was flushed, or your sewer lines were blocked due to root growth or other blockage, the loss would not be covered.
How to Get Flood Insurance
There is no special process to obtain flood insurance. While the National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA), it can actually be easily purchased through a local insurance agency in participating communities. Flood insurance is optional for many homeowners and business owners, however, it is a requirement if your property is located in an area that is high-risk for flooding and your mortgage originates from federally insured or regulated lenders.
Because the federal government administers the flood insurance program, the rates are set nationally and will be the same regardless of where your policy is purchased, so it doesn’t make sense to try to shop around for better rates.
The major factors that affect your rate include your home’s date of construction, the type of property it is, and the level of flood risk.
There are some other important things to know about flood insurance. A full year’s premium is due at the time of purchase. Also, once it is purchased, there is usually a 30-day waiting period before the policy will go into effect. Finally, some discounts may be available if the property is located in a city that participates in the Community Rating System (CRS). These communities work above and beyond the standard regulations of flood prevention and mitigation.
As we learned at the beginning of this article, you never know when or if flooding could happen to you. Therefore, it is a good idea for homeowners, business owners and even renters to find out if they should be covered for flood insurance. If you have questions or would like a quote for a flood insurance policy, call or stop in, we’d be glad to help out.