Do You Need Flood Insurance?

According to III.org the National Flood Insurance Program (NFIP) was created with three mandates: to provide residential and commercial insurance coverage for flood damage, to improve floodplain management and to develop maps of flood hazard zones.

“I have Homeowners Insurance, what do I need Flood Insurance for?”

Excellent question… The unfortunate answer is that Homeowners insurance (including Renter & Commercial Property insurance) does not cover any loss from a Flood.

“What if I purchase Water Backup & Sump Pump Failure coverage?”

As discussed in an earlier post Protect Your Home from Water Backup and Sump Pump Failure, Water and Sump Pump Backup covers drains, discharges, sump pumps, and toilets. Basically any place where excess water can backup into your home. This does NOT include Flood water.

Flood insurance is available in a separate policy offered by the NFIP and several private carriers.  However premium rates are set by the NFIP so there is no competition between carriers.

“So what events does Flood insurance cover?”

According to III.org Flood insurance covers direct physical losses by flood and losses resulting from flood-related erosion caused by heavy or prolonged rain, coastal storm surge, snow melt, blocked storm drainage systems, levee dam failure or other similar causes. To be considered a flood, waters must cover at least two acres or affect two properties.

“How do I know if I need Flood insurance?”

To find out your Flood Zone risk go to this site: http://www.floodsmart.gov/floodsmart/Â

Enter your address and find out your Flood risk profile.

FYI… Another III.org fun fact, to prevent people putting off the purchase of coverage until waters are rising and flooding is inevitable, policyholders must wait 30 days before their policy takes effect. In 1993, 7,800 policies purchased at the last minute resulted in $48 million in claims against only $625,000 in premiums.

Disclaimer:

This article is for informational purposely only. There is no legal advice being suggested or proffered and the author assumes no responsibility or liability for the actions take or not taken by the readers based upon such information.

Thank you,

Ryan H.

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