The last place you want to find water pooling is in your home, yet every year, flooding causes billions of dollars in damages – much of it to homeowners who do not live in high-risk areas. In fact, one in four home floods happen in areas that are deemed ‘low risk’. Would you have a way to keep your head above water if your house is next?
Flood insurance provides an extra layer of protection beyond your homeowners or renters insurance coverage. Whether you are legally required to purchase coverage, obligated by your mortgage lender, or simply looking for a way to protect your home and belongings against water damage, we here at Luxor Insurance can help you minimize your flood-related losses with flood insurance from the National Flood Insurance Program (NFIP).
The National Flood Insurance Program
As the most expensive annual loss-causing event, flooding is not covered by standard homeowners or renters insurance policies in the U.S. Instead, you must purchase flood insurance as a separate, stand-alone coverage through the National Flood Insurance Program.
The NFIP is managed by the Federal Emergency Management Agency (FEMA) and is intended to reduce the cost burden caused by flooding. Considering a single inch of ground water can cause tens of thousands of dollars in damage to a home and its contents, flood insurance can be a good investment for home owners, renters, and even business owners who want to avoid a major financial setback.
Types of Flood Coverage
Flood insurance from the NFIP can offer protection for the structural components of your property, as well as the contents of your home (personal property). The limit for structural coverage is capped at $250,000, and it usually covers the full replacement value of your home. If your home is value greater than the available coverage, it may be possible to supplement your NFIP coverage with additional protection from a private insurance company. The NFIP’s flood coverage for personal property is available to both homeowners and renters. This coverage is capped at $100,000, but that coverage is limited to actual cash value instead of replacement value.
Do You Need Flood Insurance?
If you live in a high-risk flood zone, the federal government may require you to purchase flood insurance. It is also possible that your existing home could be re-zoned as a high-risk flood zone, at which time you may receive a notification requiring you to purchase coverage. You can find out more about the flood zones surrounding your home by typing your address or coordinates into the flood map search tool on FEMA’s website.
Note that mortgage lenders will sometimes require homeowners to purchase flood insurance to protect the lender’s financial interests in the property even if the coverage is not required by law. Borrowers may be obligated to pay for coverage until the loan balance is paid in full.
Low to Moderate-Risk Flood Insurance
Homeowners and renters should still consider flood insurance even if the coverage is not required by a lender or law. Countless homes are flooded every year, and approximately 25 percent of them are located in ‘low-risk’ areas. Even if you only see an inch or two of water enter your home, that could still be enough to require an expensive cleanup and total replacement of your flooring, walls, baseboards, appliances, and more. By purchasing flood insurance, you could spare yourself tens of thousands of dollars in damages. Not to mention, the cost of coverage is lower for people who live in low-risk areas.
Disaster Assistance vs. Flood Insurance
Don’t make the mistake of relying on FEMA aid and disaster assistance to see you through a flood. While FEMA grants are often available after a flood, the money is only distributed if the President of the United States declares your area a federal disaster zone. Even then, the grants are usually small and intended to provide things like temporary shelter, medical bills, and living expenses – not pay to restore your home.
If your home is flooded in a disaster area and you have no insurance, your only recourse may be to dip into your savings for the repairs or to take out a low-interest loan from the Small Business Association. As with all loans, SBA funds must be repaid over time. If you had flood insurance, however, your home could be repaired regardless of Presidential declarations. Furthermore, you may still qualify for FEMA grants and financial aid if your flood damage is part of a larger disaster area.
Applying for Coverage
As with all insurance, there is no better time than now to purchase flood insurance since you never know what tomorrow may hold. However, there may be a greater sense of urgency with flood insurance given the extended waiting period before coverage goes into effect. For most NFIP applications, there is a 30-day waiting period for flood protection. An exception may be made for property owners who are applying for a new mortgage or for individuals who live in recently re-zoned flood hazard areas.
Indianapolis Flood Insurance Quotes
If you are ready to purchase flood protection for your home or personal property, you must do so using the services of an insurance agent, as the NFIP does not sell coverage direct. At Luxor Insurance, we provide the same flood insurance quotes that any other agent can, only with the helpful guidance, support, and claims assistance you’ve come to expect from a friendly and local independent agent. We can also assist you in finding supplemental flood protection if you need additional coverage beyond the available limits of the NFIP.
Other Water Damage
In addition to flood insurance, we can also help you assess your homeowners policy to ensure you are getting all the protection you need against water damages. While your policy may cover things like burst pipes, both flood insurance and standard home insurance typically exclude other things like sump pump overflows and sewer line backups. For that, you may need to add an endorsement to your homeowners policy instead.
To find out more about Indiana flood insurance and water damage coverage, contact our office today. We look forward to serving you soon.