WHAT YOU NEED TO KNOW ABOUT FLOOD INSURANCE
April 25, 2023
MOST PROPERTIES ARE VULNERABLE TO FLOODING
Flooding can happen just about anywhere it rains or snows. On average, 40% of the National Flood Insurance Program (NFIP) flood insurance claims occur outside the high-risk flood areas. That’s why it’s important to protect the life you’ve built with flood insurance, even if you live in an area with low-to-moderate flooding risk.
The official definition used by the NFIP is “A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:
• Overflow of inland or tidal waters;
• Unusual and rapid accumulation or runoff of surface waters from any source;
• Mudflow*; or
• Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.”
*Mudflow is defined as “A river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water. Other earth movements such as landslide, slope failure, or a saturated soil mass moving by liquidity down a slope, are not mudflows.”
MOST HOMEOWNERS INSURANCE DOES NOT COVER FLOOD DAMAGE Unfortunately, many property owners do not find out until it’s too late that their homeowners insurance policies do not cover flooding. The NFIP offers a separate policy that protects your single most important financial asset—your home or business.
THE NFIP OFFERS BUILDING COVERAGE
The following items are a sample of those covered under building coverage:
• The building and its foundation
• Carpet permanently installed over unfinished flooring
• Central air-conditioners
• Electrical systems
• Furnaces and radiators
• Ranges, cooking stoves, and ovens
• Refrigerators • Window blinds
THE NFIP OFFERS COVERAGE FOR YOUR CONTENTS
Whether you rent or own, make sure to ask your flood insurance agent about coverage to protect your personal property. It can be purchased separately, whether in addition to building coverage or by itself. Contents coverage usually covers items like:
• Personal belongings such as clothing, furniture, and electronic equipment
• Carpets • Washers and dryers
• Food freezers and the food in them
• Portable microwave ovens and dishwashers
If you are a tenant and made improvements at your own expense, they are covered up to 10% of the limit of liability.
YOU CAN BUY FLOOD INSURANCE AT ANY TIME
There is usually a 30-day waiting period before the policy goes into effect, with some exceptions:
If you initially purchased food insurance while securing, adjusting, or renewing a loan for your property, there is no waiting period. Coverage goes into effect when the loan is closed.
If you live in an area newly affected by a food map change, review your options with your insurance agent. Additionally, the 30-day waiting period may not apply if your property experiences food damage caused by wildfre in your community. For more information on the Post-Wildfire Exception, please visit fema.gov/wildfires-you-need-food-insurance.
Keeping these exceptions in mind, plan ahead so you are not caught without insurance. The policy does not cover losses caused by a food that occurred prior to the policy becoming effective. In addition, you cannot increase your insurance coverage once a food has begun.