Whether you own a house or rent it, you probably know that the standard insurance plan does not typically cover floods. It may not seem to be a big issue if you live in a big city or an area with low flood risk. However, floods are happening more and more often, and last year's events in Europe have demonstrated clearly that you may never know when and who may really need flood insurance.
In this article, we shall briefly go over the nature and purpose of flood insurance and see who really needs it and how to protect yourself from losses and long-term consequences caused by floods.
Why do I need insurance at all?
Most people think that insurance makes a point when you live in an area that suffers from regular natural disasters like hurricanes, storms, and tornados. At the same time, watching the news and hearing about yet another earthquake or flooding happening somewhere in the world, people tend to block their minds and assure themselves that such things are not real; they only happen in Hollywood movies and other parts of the world.
Until they become heroes of those horrible news reports. It is precisely what was happening in Europe in 2021. People were so sure that massive floods are only an issue in tropical countries that most didn't even consider profound flood control or insurance plans for their homes and businesses.
As a result, hundreds of families appeared homeless, and about 40% of businesses that suffered from a disaster never managed to fully restore and get back on the market.
Moreover, those who have insurance are often sure that the plan covers any damage caused to the property, including natural disasters like floods.
Unfortunately, it is not valid, and flood insurance plans are a separate matter that needs special attention and consideration once you want to be fully covered.
Who needs flood insurance?
There are several cases when experts strongly recommend considering flood insurance:
- your home or business are located in a flood zone;
- you are located in an inland area that has large water bodies like rivers, lakes, creeks, etc.;
- The area you live or work in has recently experienced a noticeable change in climate, fluctuating temperatures, precipitation, etc.
You can get flood insurance if you own the property or rent it. Today there are federal flood policies as well as private flood insurance.
It is essential to get covered long before the flood season approaches, no matter which variant you choose. Flood policies typically become active after 30 days. It means that if you got your flood insurance and the disaster strikes next week, you are as vulnerable as if you had no coverage at all.
The two types of flood insurance.
As we have already mentioned, you can get flood insurance from a private insurance company and the federal government. However, the federal policies, or National Flood Insurance Policy (NFIP) to be precise, are also distributed through private agents.
What is the difference, you may ask? Here are the things to consider before choosing your flood insurance policy.
NFIP
- the federal flood insurance policy provides the coverage of up to $250,000 for the building itself and up to $100,000 for the possessions;
- For the building itself, NFIP provides the necessary replacement coverage - the cost of repairs to make your house just the way it was before flooding;
- For the possessions, NFIP provides the actual cash value coverage - the current price of possessions lost to flooding;
- NFIP may have some restrictions regarding furniture, clothes, and other belongings that might have been stored in a garage or basement since those are areas of the house most vulnerable to flooding. In other words, if your garage or basement is not protected from floods with a flood barrier or any other flood control method, there is a chance that your belongings will be lost even if you have federal flood insurance.
Private market flood insurance
- many secret insurance agents offer the so-called "first-dollar" flood insurance policies. It means that a client generally receives the same conditions as the NFIP provides, but the procedure is simple, and the coverage itself is higher and has fewer conditions and exemptions;
- Even if you already have the NFIP coverage, you can get the so-called excess flood insurance, which provides much more comprehensive coverage and higher rates. It is an excellent idea for those who live in high flood-risk zones as well as communities that, for some reason, don't participate in the NFIP program.
Can flood insurance be mandatory?
Although it is up to you whether to get covered against flood damage or not, there may be a case when you are required to get flood insurance by all means.
It happens when you get a mortgage from a federally-regulated lender for a property located in a high0risk flood zone. Although technically, any lender has a right to require flood insurance even if the property is located in a moderate or even low flood risk zone and the lender itself is not bound with federal regulations.
With floods happening more and more often, the requirement to arrange flood insurance is becoming more and more common when it comes to mortgages.
Will flood insurance protect my property entirely?
On the one hand, flood insurance is your guarantee that even in the case of severe flooding, the losses and damage to your welfare will be minimal.
However, you should keep in mind several things. First of all, as we have already mentioned, flood insurance may not cover possessions located in vulnerable areas of the house like the garage and basement.
Also, flood insurance won't keep you safe during the flood. It means that you still have to reinforce your house and protect it from floodwater.
In most cases, the cost and rates of flood insurance for you will depend on the condition of your building and flood control measures that you and your local authorities currently take.
In other words, even if you decide to get flood insurance, don't forget about the modern anti-flooding solutions that will minimize the damage and even keep you safe during the flood season.
Flood barriers are not only the most efficient flood control product on the modern market, but, unlike other analogs, they can be installed on basement doors and garage gates. It will save the things that may be lost beyond repair and won't be covered by the insurance plan.
Contact Dam Easy today and learn more about our flood barriers and other modern flood control solutions that will guarantee your safety during the flood and help you get the most out of your flood insurance policy.
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