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
