Many people overlook coverage for flood damage when they are buying insurance. However, floods are the most common type of natural disaster in the United States. Each year flooding causes an average of over $3.5 billion total in damages in the country. Most homeowners policies do not provide flood coverage and those caught without it often lose a lot of money, as well as valuable possessions.
Read below to learn more about the benefits of purchasing a flood insurance policy:
What is flood insurance?
Flood insurance policies help protect property owners from flood water damage to their property and possessions.
Is flood insurance included in my homeowner’s policy?
There is a common misconception that homeowner’s insurance covers flood damage when, in fact, it typically doesn’t. Most standard home insurance policies do not protect homeowner’s from damages arising from a flooding condition. In a recent study, 44 percent of Americans believed they were covered from weather-related floods, when only 15 percent actually purchased a flood protection policy from the National Flood Insurance Program (NFIP).
Do I need flood insurance?
The closer a house is to a water source, the more likely it is to flood. But, even houses several miles away from water, can still suffer from flood damage. In fact, 25 percent of all flood insurance claims come from areas with moderate-to-low-risk, according to research conducted by the Federal Emergency Management Agency (FEMA). Even if you are miles from water, ‘ponding’ of water in generally dry areas can occur, and this can only be covered under a flood policy.
Flooding doesn’t only occur in areas near a major body of water or during a major storm. A slow-moving storm or the overflow of any water source can cause flooding. Even a few inches of water can lead to sever water damage that can cost thousands of dollars. According to the NFIP, just an inch of water in a 2,000 square foot house can cost up to $21,000 in damages.
If you live in a high-risk zone, your mortgage company may require you to have flood insurance. If you don’t live in a high-risk area, it may not be mandatory.
However, you should strongly consider purchasing a separate NFIP policy in addition to your home insurance, since floods can occur anywhere and the effects could be devastating.
What does flood insurance cover?
Flood insurance can cover both the building and the contents inside, depending if you purchase coverage accordingly. The maximum amount of coverage available for a building is $250,000 and the maximum available for contents is $100,000. However, the amount of coverage depends on the each individual situation. We recommend speaking to an insurance agent at Berliner-Gelfand to determine the coverage and policy you need.
Building property coverage can protect:
- The building and its foundation
- Electrical and plumbing systems
- Central air conditioning equipment, heating systems, furnaces, and hot water heater
- Major kitchen appliances
- Permanently installed carpeting over unfinished floors
- Permanently installed paneling, bookcases, wallboards, and cabinets
- Window blinds
- Detached garages
Personal contents property coverage protects:
- Clothing
- Furniture
- Electronic equipment
- Curtains
- Portable and window air conditions
- Portable appliances (microwaves, dishwashers)
- Carpeting not covered under the building coverage
- Washing machines and dryers
- Freezers and the food stored in them
- Valuable items up to $2,500
What doesn’t it cover?
Most policies don’t insure basements, crawlspaces, lower floors, and other areas that are considered to be belowground, including some/most ‘building’ items contained therein
Typical NFIP polices excludes coverage for:
- Damage caused by moisture, mildew, and mold that could have been prevented by the property owner;
- Property and items outside of the dwelling, including trees, plants, walkways, wells, decks, septic systems, patios, fences, swimming pools, and hot tubs;
- Currency, precious metals, and valuable papers;
- Living expenses (temporary housing);
- Financial losses incurred from business interruption;
- Most self-propelled vehicles (cars, motorcycles).
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