I Don't Have Flood Insurance. Do I Need It? 

homes surrounded by flood waters

Here are some facts that most people do not realize when it comes to flood:

  1. Floods are the nation’s most common and costly natural disaster and cause millions of dollars in damage every year.
  2.  Homeowners and renters insurance does not typically cover flood damage.
  3. Floods can happen anywhere–More than 20 percent of flood claims come from properties outside the high risk flood zone.
  4.  Most federal disaster assistance comes in the form of low-interest disaster loans from U.S. Small Business Administration (SBA) and you have to pay them back. FEMA offers disaster grants that don’t need to be paid back, but this amount is often much less than what is needed to recover. A claim against your flood insurance policy could and often does, provide more funds for recovery than those you could qualify for from FEMA or the SBA–and you don’t have to pay it back.

If you’re thinking about buying flood insurance, you may want to know a few things before you jump in. Flood insurance is available for commercial, home and property coverage.  There are 3 main components to each policy:

  • Building coverage pays to repair or replace the insured building and its foundation, electrical and plumbing systems, central air conditioning, furnaces and water heaters, refrigerators, stove, built in appliances and most other permanently installed items.
  • Contents coverage provides payment for the contents of your home or building, such as clothing, furniture, electronic equipment, portable appliances, and larger removable items like washers and dryers.
  • Replacement cost is a valuation method for establishing the value of insured property for purposes of determining the amount the insurer will pay in the event of a loss. It is typically defined as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation.

Basic building coverage is available up to $250,000 for home and up to $500,000 for commercial, while basic contents coverage is available up to $100,000 for home and $500,000 for commercial.

When you speak with your agent, you may decide that you need more coverage than is available in the basic plans. If so, you may opt for an ‘Excess Flood Policy’, which covers damage over and above your standard policy.

Clear as mud? Of course it is! We will lead you through the murky waters of flood insurance so that you can see how the pieces fit together and get the best coverage for your money.