4 Things You Should Know About Flood Insurance

If you live in anywhere prone to flooding, your standard homeowner’s or business coverage policy may not be enough. How do you know if you need flood insurance?  This is something you want to figure out before the water comes into your house.  Consider whether your home or business is in a flood plain.  You should also ask when purchasing the property if it has flooded in the past.  Either way, here are 4 things you need to know about flood insurance.

The National Flood Insurance Program (NFIP) was created by Congress in 1968.  NFIP provides flood insurance where traditional home and business insurance policies do not.  Flood insurance is purchased separately through insurance agents.  There is a 90 day waiting period on the effectiveness of flood insurance.  The moral of the story, buy it before you need it.  Flood insurance comes in two forms: commercial and residential.

Commercial Coverage Includes:

Commercial policies cover structural damage to the home or building’s exterior and foundation.  Commercial policies also cover damage to some indoor items including:

• heating and cooling systems
• appliances
• carpeting and flooring
• personal items in the building
• debris removal

Commercial Coverage Does Not Include:

Even if you have the foresight to purchase commercial flood insurance, it doesn’t cover the following:

• moisture or mold damage
• landscaping, pools, or decks
• septic systems
• financial losses from the business interruption

This is important to remember.  Your business could be down for an extended period from flooding.  Business interruption insurance is something that every business should consider.  Storms, fires, and other unexpected events can close a business interrupting your revenue.

Residential Policies Cover:

If your house has flooded in the past or is in a flood plain, consider residential coverage.  Residential flood insurance covers things like:

• personal items in your home
• furnishings
• clothing
• appliances
• central air conditioning and furnaces

Consider the cost of replacing what is in your refrigerator and pantry.  Replacing your food may cost the same as one year of flood insurance.

Residential Policies Do Not Cover:

Although you take the extra step of purchasing flood insurance, you may have expenses that aren’t covered.  Make sure to discuss these items and whether they are covered by your homeowner’s policy.  Excluded items can include:

• temporary housing
• cars, trucks, boats, and ATV’s
• pools and patios
• landscaping and landscaping lights

Flood insurance may come at a reasonable price.  Especially in comparison to your homeowner’s coverage.  Although flood insurance may help reduce your risk, it doesn’t cover everything.  Make sure to discuss your coverage in detail with your insurance agent.  You want to make sure you are covered before the hurricane or storm.