Flood insurance covers damage caused by floods. Most people do not realize that homeowner’s insurance usually does not include coverage for flood-related damage and is issued separately.
In order to be considered, the flood must cover at least 2 acres of land and affect at least two properties (one being yours). In addition, the flood must be caused by tidal waters or unusual rapid flowing waters from another source. Mud flow is also considered.
Flood insurance policies are most beneficial for homeowners or business owners that are located in a “special hazard flood area.”
If you encounter loss or damage, you must first file a claim. Your claim will be then reviewed by a claims adjuster. They will contact you to ask specific questions about the loss to determine what coverage applies to your claim. The adjuster will then finalize your claim with damage estimates and your settlement amount. Once approved, you can begin to start making repairs, relocate or move your home, depending on the extent of damage.
Coverage is offered in two parts:
Home or business property is often referred to as building coverage. Building coverage can insure your home up to $250,000. For business property, the coverage maximum is typically $500,000. Replacement coverage is also available if you need to move.
Contents coverage is for insuring your personal property that may have been damaged. Belongings are covered at actual cost value not a purchase price. Generally, personal property coverage is up to $100,000 for residential and up to $500,000 for business property.
By obtaining coverage, you are literally saving money for a rainy day. You will avoid paying out of pocket costs for extensive damage caused by flooding.
Having coverage for flood damage provides you with control over the situation. Claims are paid even if the disaster is not declared by the government.
Flood coverage is affordable. Depending on your risk, you could pay as little as $200 annually for coverage.
If you have purchased a new home or started a business establishment, consider getting coverage to protect your assets from flood damage.