Most people would agree that ensuring their valuables are protected is a sound decision, and your home is no different. Fortunately, there are homeowners’ policies which you can purchase to cover your home and its contents from several unforeseen perils including damage from wind, fire or hail. But what about flood damage?
Although homeowners’ policies offer a robust selection of coverages and protection from various risks, they do not cover damage caused by flooding. In the insurance industry flooding is considered a gradual event rather than an accident, so conventional homeowners’ policies do not apply. It is because of this that separate insurance for flooding exists, and it is often overlooked by the average homeowner.
While flooding accounts for billions of dollars in damages and affects nearly five million Americans each year, fewer than 15% of American homeowners carry flood insurance. Even in the highest-risk areas that sustain the most damage during floods, fewer than one third of area residents are adequately covered. It seems that many Americans just do not know the potential risk that floods present, so let’s take a moment to explore some of the commonly asked questions regarding flood insurance and what it can do for you!
What does flood insurance cover?
Flood insurance is generally broken down into two different types of coverages: building coverage and contents coverage. Building coverage provides insurance to the structure of your home and its permanent fixtures and appliances. Contents coverage provides insurance to your personal belongings, valuable items, and carpets otherwise excluded from building coverage.
Is flood insurance mandatory
While the average homeowner is not required to carry a flood insurance policy, residential and commercial properties located in high-risk flood zones are required to carry such coverage if they took a mortgage from a federally regulated or insured lender. Although you may not live in a high-risk zone it is important to check on these potential requirements during home buying.
Who needs Flood insurance?
Ultimately, if it can rain then it can flood. All fifty states in the US have recorded flood or flash flood incidents with property damage reported. While those in low-to-moderate risk zones may feel that the likelihood is incredibly low, that does not erase the risk. You may be surprised to learn that an average of one-third of federal disaster assistance set aside for flooding goes to policyholders outside of high-risk areas. Be sure to educate yourself on your area’s potential for these disasters!
How do I get flood insurance?
The same way you would obtain an auto or life insurance policy: contact your agent! Your agent can help you purchase policies with the National Flood Insurance Program or a private insurer depending on your needs. The National Flood Insurance Program is a government initiative that works with property owners in over 20,000 communities to provide flood insurance to those who need or require it. Up until 2019 this was the only way to purchase flood insurance in most instances, but federal regulators have now allowed lenders to accept private flood insurance policies under certain restriction. There are some distinct differences between the two, so make sure you discuss your needs with your agent if you think you may need coverage!
There is a great deal of information out there regarding flood insurance, and here at Insurance Strategies The Cooksey Agency our agents are knowledgeable and ready to help you get the peace of mind you deserve! For more information on flood insurance available to you, or any questions you may have about your potential needs, give us a call today at (757) 819-6896!