With recent hurricane and tropical storm devastation and the start of hurricane season, it’s important to review your insurance policies if you are a homeowner. Regardless if you live in a high-risk flood zone, every home owner should consider flood insurance. Here are some common Flood Insurance FAQs.
Does my homeowner’s insurance policy cover flooding?
No, flooding is not covered by homeowner’s policies and must be purchased as a separate policy.
I don’t live near water or in a flood-prone area. Do I still need flood insurance?
Flooding is the most common natural disaster in the US and although you might not live near water or are in a low-risk zone, anyone can be financially vulnerable to floods. Floods can result from storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure.
Won’t federal disaster insurance cover any flooding to my property?
Not usually. Federal disaster assistance only made available if the President makes a declaration and over 90% of flooding is not Presidentially declared. Even if there is a declaration, most assistance is in the form of a loan, which must be paid back with interest. However, flood insurance will cover damages without the declaration and doesn’t have to be paid back.
How affordable is flood insurance?
Flood insurance is quite affordable, much less than might expect. Contact your local insurance representative to get a rate quote or visit FEMA’s website for estimated premiums.
Can anyone purchase flood insurance?
In order to purchase flood insurance, your community must participate in FEMA’s National Flood Insurance Program (NFIP), a federal program designed to provide reasonable flood insurance to homeowners, business owners, and renters. You can determine your eligibility here. A list of private insurance companies that sell and service NFIP flood insurance policies is also available online.
Why is my mortgage lender requiring me to purchase flood insurance?
Federal law requires the purchase of flood insurance for all federal or federally-related financial assistance for the acquisition and/or construction of buildings in high-risk flood areas. Even if you are in a moderate-to low risk area, your lender may still require it. It’s also important to note that if during the life of your loan, the flood maps are revised and your property now falls into a high risk area, your lender will notify you that you must purchase flood insurance.
What is covered by a flood insurance policy?
Direct physical losses caused by floods are covered. Loss from flood-related erosion caused by strong, abnormally high waves or currents of water activity, severe storm, flash flood or abnormal tidal surge are also covered. Basement structures, essential equipment and other basic items normally located in a basement are covered; however, flood insurance does not cover basement improvements, such as finished walls, floors, ceilings or personal belongings kept in a basement.
What if I want to purchase more insurance than what the NFIP offers?
Excess Flood Protection is offered by many private insurance companies. It provides limits over and above those offered through the NFIP. For more information, contact your insurance agent.