Top 10 Flood Insurance Tips

February 17, 11:32 AMReal Estate News ExaminerBroderick Perkins

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Weather patterns of warmer temperatures, heavy rains and snowmelt are on the rise.

Unfortunately, many homeowners shoulder the burden of flood damage without the financial cushion of flood insurance.

Too often, that's because homeowners believe they cannot buy flood insurance or don't need it.
The National Flood Insurance Program (NFIP) begs to differ.

Top Ten Things You Should Know About Flood Insurance

1. Flood insurance is available. As long as you live in a participating NFIP community, and there are more than 20,600 nationwide, you can purchase flood insurance from your insurance agent. Renters, condominium owners, homeowners and business owners are all eligible to buy coverage.

2. Floods can happen anywhere, anytime. Heavy rains, melting snow, failed protective devices such as levees and dams, as well as tropical storms and hurricanes can all spawn floods where you least expect it. Even if your home isn't in a high-risk area, where law requires flood insurance, that doesn't mean you don't need the coverage. Ask your insurance agent about flood insurance options.

3. Flood insurance isn't homeowners insurance. Homeowners insurance does not cover losses due to flooding. Federal disaster assistance is not always available after a flood because disaster assistance declarations come after fewer than 50 percent of flooding events. Assistance typically available comes in the form of a low-interest loan.

4. Flood insurance is affordable. The average flood insurance premium is about $500 per year. If you live in a moderate-to-low risk area, lower-cost Preferred Risk Policies start as low as $119 a year. Flood insurance rates are federally set and will not differ from one insurance company to another.

5. Flood insurance is available for your building and its contents. Individuals typically must choose to carry building or contents coverage - or both. However, if you live in a lower-risk area, you may be eligible for a Preferred Risk Policy that covers both your structure and personal items for a lower cost than a standard flood policy. For a complete summary of building and contents items covered by flood insurance, see NFIP Summary of Coverage.

6. Know NFIP coverage limits. A maximum of $250,000 of building coverage is available for single-family residential buildings; $250,000 per unit is available for residential condominiums. The limit for contents coverage on all residential buildings is $100,000, which is also available to renters.

7. Understand the "100-year flood." The government’s definition of a floodplain, or high flood risk zone, is an area which has at least a one-in-100, or one percent chance, of flooding in any given year. These one percent chance flood events are often called "100 year floods", but that doesn't mean they happen every 100 years. The 100-year flood benchmark is a minimum standard used for insurance purposes. While major flood events are not common, they happen, have happened recently and will happen again.

8. Levee protection isn't absolute protection. Levees, dams and other flood control structures are designed to protect against a certain level of flooding. In more serious flood events, levees can fail or overtop. Age also reduces their level of protection. If you live near a levee, dam or other flood control structures, NFIP highly recommends buying flood insurance.

9. How to file a claim. After a flood event, call your agent or insurance company and ask when to expect an adjuster at your home. Be sure to call your insurance company back if you haven’t been assigned an adjuster within several days of flooding. Before the adjuster arrives, separate damaged and undamaged items, take photos, make a list of damaged or lost items and make a copy of the damage estimates prepared by a contractor to give to the adjuster. Once a detailed proof of loss statement has been prepared and agreed upon, your claim can be submitted.

10. Stay insured. You can purchase flood insurance at any time. However, there is usually a 30-day waiting period before the policy becomes effective. If you already have a flood policy, remember: your policy needs to be renewed each year.