Flood Insurance — Are You Covered?


Whether you have flood insurance already or are debating purchasing it, you might be wondering what exactly is covered or not covered under your policy. Many times, this can be one of the most unclear coverages to decipher.Do you have flood insurance? If you live in a high-risk flood zone, chances are you do as a requirement.

“Most buildings, if they’re in a flood zone, have to have flood coverage,” says Don Einsidler, president of the property management firm Einsidler Management. “Basic flood coverage is through the federal flood program written by various insurance companies.”

“If you live in Zone A, the hundred-year flood plain, then you’re required through your mortgage lender to purchase and maintain flood insurance when you have a federally backed loan on your property,” adds FEMA spokesman Ed Conley.

Whether you have flood insurance already or are debating purchasing it, you might be wondering what exactly is covered or not covered under your policy. Many times, this can be one of the most unclear coverages to decipher.

To avoid a potential headache later, here’s what you need to know about flood insurance coverage:

Renters or homeowners insurance doesn’t cover floods

One of the most common misconceptions about flood insurance is that having standard renters or homeowners insurance means you’re automatically covered in case there’s a flood. However, in order to have flood coverage, you need to purchase a separate flood insurance policy. You can find policies through the National Flood Insurance Program, administered by the Federal Emergency Management Agency. If you live in a community that participates in the National Flood Insurance Program, federal flood insurance is also available through companies and agents certified to sell it.

Not everything is covered in the basement

If you have flood insurance, you might think that if your basement floods, you’re covered no matter what the damage done is. However, coverage may be limited when it comes to this room in your home. Contrary to what many think, many times carpeting and floor tile in a basement are not covered under a flood insurance plan. Only some structural elements, like central air conditioners, foundation walls, electrical outlets, furnaces and hot water heaters, are covered. Check your policy for details.

Replacement cost coverage is not included

Whereas, for example, home insurance allows you to purchase replacement cost coverage for personal belongings, flood insurance includes only “actual cash value coverage for destroyed personal possessions. The difference between the two is that replacement cost coverage reimburses you the money to replace a destroyed item with a new one, whereas actual cash value reimburses you for the value of the item at the time when it was destroyed. For example, if your computer was destroyed in a flood, you’ll receive reimbursement for what the computer’s cost was when it was destroyed, instead of the money to purchase a new one.

Outside house items are not included

Flood insurance coverage stays within the confines of your home, and it doesn’t go to the outside. That means items such as hot tubs, swimming pools, decks, patios, fences, landscaping, walks, wells and septic systems are not included in flood insurance. Similarly, while flood insurance covers removal of debris due to a flood inside or on the home’s structure, it does not cover the same in the yard.

Flood insurance has a 30-day waiting period

That means if you purchased flood insurance 25 days ago and experienced flooding during that time, the flood insurance has not gone into effect yet, and therefore you will not be covered. Thus, it’s a good idea to think ahead and try not to wait on purchasing flood insurance until the day before a storm. There are exceptions to the rule, however. These include buying additional insurance when renewing a policy or as a result of a map revision, or if a lender requires you to have flood insurance for a home loan.

To learn more about flood insurance coverage, visit www.floodsmart.gov or http://www.fema.gov/national-flood-insurance-program.

 

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