The most important fact to know about your homeowners policy is that no standard home or landlord insurance policy will cover you for damages associated with flooding. Period. (You may want to read that sentence a second time.)
According to FEMA, 25% of all floods happen in “non-flood zones” resulting in those unsuspecting homeowners scrambling to collect nearly one-third of all federal disaster relief for flooding.
Myth: All Flood Insurance Is the Same
Fact: Traditionally flood insurance policies are administered by the National Flood Insurance Program (NFIP) which is an agency authorized by FEMA. The NFIP was established in 1968 by the federal government because private flood coverage options were lacking.
According to FEMA reports, private insurance companies are beginning to write flood coverage quite a bit. In fact, between 2016 and 2017, it’s been reported that premiums for privately written flood insurance increased by 57% resulting in $589 million premium dollars
Myth: Flood Insurance Covers Very Little
Fact: On the contrary, flood insurance can cover quite a bit. Check out the details below.
- Debris removal and cleanup
- Exterior walls, staircases, and flooring.
- Plumbing and electrical systems, central air conditioners, water heaters, and sump pumps.
- Refrigerators (except the contents), built-in appliances like dryers, washing machines, ovens, and dishwashers.
- Permanently installed window decor (e.g. blind or curtains), carpets.
- Permanently installed cabinets
- Electronics, furniture, clothing so long as it’s not stored in the basement.
- Fine furs, artwork, collectibles, jewelry are usually covered up to a maximum amount like $2,500 per listed item.
Often you can use as much as 10% of your rebuild limit to repair detached sheds, garages, or other buildings on your property.
Myth: Flood Insurance Costs Too Much
Fact: Flood insurance rates can vary quite a bit depending on the following factors:
- Insurance Company
- State
- Flood Zone
- Property Use (primary residence vs vacation home, rental, etc.)
- Property Coverage Amounts
According to FEMA, the average premium for flood insurance is around $700 and $30,000 is the average claim payout.
Myth: If my property did flood, I’m sure it wouldn’t cost me a lot.
Fact: FEMA reports that just five inches of flood water can cost you a minimum of $11,000 in property damage.
Myth: It Never Floods Here So I Don’t Need It
Fact: Did you know 55% of homes damaged during Hurricane Harvey weren’t in a flood zone either?
There are many common situations that cause flooding even outside the coastal areas:
Highly-Developed Areas: Communities with many new roads, parking lots, and buildings are built on concrete so there’s no available ground to absorb flood waters. That means flood waters may actually roll along the pavement right to your front door.
Forest Fires: Once a wildfire burns down there’s automatically an increased risk of flooding since there’s no trees or bushes to absorb flood waters.
Rapid Snowmelt: Desert regions of western America often experience quick snowmelt which cause flood waters.
If you’re considering flood insurance, talk to an experienced agent at Gonzalez & Co. for help. Our agency works with several private flood carriers and have been able to reduce NFIP premiums substantially for homeowners and business owners. Get a quote or talk to an agent.