Recent Posts:Flood Insurance - Know Your OptionsThe following is meant to provide insight, tips and raise awareness regarding Flood Insurance – PLEASE check with your insurance provider for any questions or guidance.
If it rains where you live (DUH) you probably need flood insurance. Many Homeowners across the Carolinas are confronting financial disaster. Various estimates suggest about 1 in 10 homes in the Carolina counties hit hardest by Florence have flood insurance. When folks hear their property isn’t in a flood zone they assume there is no risk – a BAD assumption. And “flood insurance” doesn’t cover living expenses if you have to shelter elsewhere because of a storm or relocate while repairs are being done.
Most Flood Insurance coverage is provided by the NFIP – National Flood Insurance Program – which is a Federal program. There is also Private coverage available, usually for amounts exceeding the $250,000 max coverage threshold, but it is usually more expensive.
Rarely, if ever, does a typical Homeowners policy cover damage from a flood. (See below for more information)
Most people who have flood insurance have a mortgage, because the lender requires it. But your entire home may not be covered. For example, in a split or bi level home, the lower “level” may not be covered as it is below ground level. And contents is not covered unless you have specific coverage for contents. Be aware of what you are covered for with ANY insurance policy – ASSUME NOTHING!
FEMA (Federal Emergency Management Agency) may offer disaster relief funds as approved by the President – but these are typically low interest rate LOANS, which you have to pay back, or small grants, and the funds can take weeks or months to get.
About 20% of flood claims come from folks who are NOT in a flood zone.
Flood Insurance premiums are based on risk factors – how close are you to water, are you in a flood plain and what is your flood zone designation - - A, V, B, C, X, etc. – the designation matters. Is your property on a hill, mound or stilts (elevation) – is there a crawl space, basement with an exit, age of home, size of your deductible and other risk considerations.
Typically the maximum coverage is $250,000 for the structure and $100,000 for contents.
A vacation home, rental/investment or business property, typically has higher premiums.
Read your Homeowners policy and call your agent to specifically find out what is covered. Water down –rain from the sky onto your home, if the wind damages the roof or windows is different from water up – flooding from the ground because of waterways flooding, snow melting or massive amounts of rain draining into low ground areas (like in North Carolina this week with the hurricane). The former probably is covered and the latter probably not by your homeowners policy. If a water pipe breaks or busts from freezing or the hot water heater breaks – does your homeowners cover that water damage – probably yes. But ask!
Water causes more problems than wind, historically. Water surge along waterways and flooding cause more damage and deaths than wind. Hurricane categories – 1 thru 5 typically are designated because of their “wind speed”. Florence was once a category 4 – “major storm” but hit land I believe as a “1”. BUT it was a “big storm” that didn’t move much for days dumping unprecedented amounts of water causing MAJOR flooding and damage.
Flood claims to the NFIP typically take time to process and get paid – weeks and months can be typical – just ask a homeowner who had damage from Superstorm Sandy.
Almost any property is eligible for flood insurance. You do not have to be in a flood zone to have flood insurance and it is MUCH cheaper if you are NOT in a designated flood zone.
FLOOD INSURANCE coverage typically takes 30 days from application date for coverage to begin. And typically insurance companies limit new homeowners policies or increases in existing coverage if there is notice of an approaching Hurricane or other predictable disaster. The moral here is to evaluate your needs when you don’t need the coverage.
How to determine if you are in a flood zone – If you have a mortgage your lender would have done the research through their required compliance practices. They use professional services to determine if you are in a flood zone and if so, your flood zone designation. Believe this is done for Home Equity loans as well and also commercial building loans. When and if you pay-off your mortgage you are no longer required to have the coverage as the lender no longer has any risk- - YOU DO. So you now have to decide to pay a premium or gamble that there will be no flood. One can always go on line to see different maps to determine if you are or are not in a flood zone. I would not make that determination on my own. Contact your insurance carrier and ask them to investigate for you. ALWAYS check with a licensed professional insurance agent in any case!
Not all doctors or attorneys have the same skill level and that also applies to insurance agents. So if you are not sure about what you are hearing, get a second opinion. Protect your home!
Floodsmart.gov – is a site you can go to for more information
Questions or inquiries need to go to your insurance carrier. Not having flood insurance can be VERY expensive! Dennis Dovie | 09/20/2018
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