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Not Having Flood Insurance Is a Gamble with Your Home

In May 2010, storms in Nashville, TN dumped 13 inches of rain on the city and created damages of $1 billion. In some hard-hit neighborhoods, residents who had fled their homes returned to find mud-caked floors and soggy furniture.  Without flood insurance, the cost to recover could be catastrophic.

If a flood rolls through your area, how would you pay for damages to your home? Many homeowners assume they can rely on their homeowner’s policy, unaware that flood coverage is not automatically included. In most cases, a separate policy is needed through the National Flood Insurance Program (NFIP) or other private insurance carriers such as American Bankers. Did you know that 1 in 4 flood damage claims come from low risk areas?

What is Flood? 

Flood is defined by FEMA as: “a general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or 2 or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation of runoff of surface water from and source, or from mudflow.”

Simply put, there must be damage to your home and the home next door to you in order to collect payment on a flood claim (unless you are situated on 2 or more acres of land).  

Please note, neither flood insurance nor homeowners insurance covers mudslides/landslides that may be associated with a flood. Separate policies may be available, so please contact your insurance advisor for more details.

Who may purchase flood insurance policies?

Flood insurance is available to all homeowners, condominium owners or renters through the NFIP, and recently carriers such as Chartis and Fireman’s Fund.  Your insurance representative can advise what type of flood zone your home is located (high risk or low risk). 

 How much flood insurance coverage is available?

 The maximum limit of flood coverage for a residential dwelling is $250,000 and $100,000 contents. A minimum deductible of $1,000 applies to each coverage (more deductible options are available). Additional flood coverage can also be purchased as a separate policy (excess flood coverage).  Primary flood coverage is typically inexpensive, especially for properties located in a low risk area; the average cost is under $400 per year.  

 Flood Insurance is your only guaranteed protection against one of the most common natural disasters. Getting it is easy, but don’t delay — a 30-day waiting period is required before a new policy can take effect.

 Disclaimer: The above response is a general overview of flood insurance which is provided for discussion purposes only and is not in any way meant as providing recommendations or legal counsel. It is not intended to apply to each circumstance. Because the facts and circumstances of every matter differ and the terms, conditions, exclusions and limitations contained in insurance policies vary, you should review your policy carefully and seek any legal counsel that may be necessary or appropriate.  If you would like to further discuss the issues raised here, you may contact Erin Powers by phone 818-933-2791 or email epowers@mmibi.com

Don’t Blog Yourself into a Lawsuit!

(source: IRMI)

The Internet is a fascinating place that is opening up new forms of social interaction, activities, and organization of information. Social networking websites such as Facebook, Twitter, and MySpace are creating revolutionary ways to interact with people all over the world. In addition, websites such as Amazon, Yelp, and Angie’s List allow people to post online reviews of businesses of all types. The explosive growth in these types of activities in the last few years is truly amazing.

These undertakings, however, have a dangerous element. Blogs and postings of a negative nature (even if they are true) can result in unpleasant and costly lawsuits against the author. Note that it may still take time before there is a good body of caselaw to support freedom of speech online in blogs, forums, and social media publishing sites. And remember that freedom of speech does not mean you can say anything you want anywhere. Freedom of speech implies responsibility; its use should generally be for the benefit of the greater good. So the following are some risk management tips to consider before posting or blogging negative comments on the Internet.

Check your facts carefully and thoroughly document your sources. Truth is a complete defense in a libel case, although you still may run into expensive legal bills defending yourself. If you find that your facts are incorrect, remove the inaccurate content and consider issuing a correction or retraction.

If you purchase a product online and have an unpleasant experience with the seller, it might be wise not to post a negative comment or rating on the website. If you do post an adverse comment, be sure that it is objectively written, based on solid facts concerning your own direct experience, and not written in an inflammatory manner. If you are a blog master and someone is posting false and incendiary statements on your site, remember that you may be held liable for these remarks since you are the “publisher.”

Seek protection for your rights. The Electronic Frontier Foundation, a not-for-profit organization, has a mission to safeguard the rights of those who use digital media and to provide legal guides to bloggers both large and small. It also offers helpful ideas to those bloggers and online posters to avoid libel suits.

Make certain your homeowners policy includes a personal injury endorsement to cover libel and slander suits. Most standard insurance company policy forms do not provide this automatically, and it can be added for a small additional premium.  Also, consider buying a personal umbrella policy, which generally provides broader personal injury coverage.

If your blog is a money-maker, look into business liability coverage since the typical homeowners policy contains numerous business-related exclusions and restrictions. If you operate a small home-based business in conjunction with your blog or online business, consider requesting that a home-based business endorsement be added to your homeowners policy.

Get more personal lines insurance and risk management tips and ideas from IRMI.

Copyright 2010
International Risk Management Institute, Inc.

While these tips were carefully researched by our personal lines experts, they are of necessity general in nature and not intended as legal, consulting, or other professional advice. They may also become outdated over time as business conditions and insurance industry practices change. We provide them to you “as is,” and it is your responsibility to assure that the advice they provide is applicable to your geographic area, the insurers you represent, your state’s insurance regulations and environment, etc.

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