This month’s Eastern Insurance Guest Blogger is Jessica Harder, who has been with Eastern Insurance for over ten years. She began as a Personal Lines Uploader and has advanced through a variety of roles including Flood Specialist to her current position as Personal Lines Team Lead. She will be sharing her extensive knowledge of Flood Insurance, and the importance of having it regardless of where you live.
When you think of a flooding event that could damage your home, the first images that usually come to mind are the catastrophic events generated by Hurricanes Katrina, Sandy, or Harvey. While you’d be right, and these catastrophes do generate substantial flood damage to hundreds or thousands of homes in a single blow, many of the claims filed for flood insurance occur under much more ordinary circumstances. Seemingly innocent streams and lakes can overflow after periods of heavy rain, nearby construction could change local drainage and cause flooding during a spring thaw, and a sudden summer thunderstorm can generate a flash flood in even the aridest landscapes. It’s the everyday situations like these that are the reason why over 20% of FEMA’s flood claims come from properties outside high-risk flood zones.
In these times of environmental change, with natural disasters and other extreme weather increasing in frequency and severity, it is wise for all homeowners to consider the benefits of a flood insurance policy, as no home is truly without risk of a potential flood claim.
What Is Flood Insurance?
A Standard Flood Insurance Policy is a single-peril (flood) policy that pays for direct physical damage to your insured property up to the replacement cost or Actual Cash Value (ACV) of the damages, or the policy limit of liability, whichever is less. In some instances, an Excess Flood Policy may be needed to cover the Replacement Cost if it exceeds the NFIP maximum limit of $250,000. A flood insurance policy needs to be purchased separately because a standard homeowner’s or renter’s insurance policy does not cover damages from flooding.
Your flood insurance policy is needed to cover losses to your property caused by flooding. It provides coverage for things such as:
Damage to heating/cooling systems, such as your furnace, water heater and central air-conditioning
Flood debris clean up
Damage to electrical and plumbing systems
With flood insurance, you will have coverage if a flooding event were ever to impact your home, and that can be extremely valuable. According to FEMA, as little as one inch of water in your home can generate over $25,000 in damages.
Why Should I Consider Flood Insurance?
Everyone lives in an area with some risk of flood — it’s just a question of whether you live in a low-, moderate-, or high-risk area. You can determine your level of risk with the FEMA Flood Map Tool. Even if you live in an area with low or moderate flood risk, you are five times more likely to experience flooding than a fire in your home over the next 30 years.
For example, many homeowners who suffered flood damage from Hurricane Harvey lived outside of the most high-risk flood zones and did not have flood insurance when the hurricane hit land. In addition to the rain, rivers swelled at record levels and caused catastrophic damage to hundreds of homes in Houston. Some estimates put only 20% of homeowners of flood-damaged homes as having flood insurance, leaving the rest personally responsible for the bills.
It’s not always large storms and hurricanes that cause damage — if you live in a low or moderate risk area, flood damage can be caused by events that seem barely noteworthy, such as spring thaw and snowmelt, outdated or clogged drainage systems, new housing or commercial developments, and flash floods caused by heavy and sudden rainstorms.
The cost of an annual flood insurance policy may be lower than you think. The average flood insurance policy costs only $700 annually, which pales in comparison to the average flood claim of $43,000. To learn more about what it would cost to get flood insurance for your home, talk to one of Eastern Insurance’s dedicated flood insurance professionals to determine your estimated annual premium.
Why You Need Flood Insurance Even Though FEMA Provide Emergency Funding After Disasters
What many people misunderstand about emergency funding provided by FEMA for homeowners following disasters is that the money is given in the form of a low-interest loan, it is not an insurance payment or a gift. You will still be financially responsible for the damage that occurs in your home, which, in the case of flooding, can easily cost tens of thousands of dollars, or more. Additionally, federal law requires applicants who receive federal disaster assistance for their flood-damaged home or personal property to purchase flood insurance coverage, if eligible. You can learn more about federal disaster assistance here.
Understanding Your Flood Insurance Policy
A flood insurance policy will cover building and structural damage, but unlike your homeowner’s insurance policy, your personal contents within the basement or crawlspace are not covered. FEMA provides full details on flood insurance coverage here.
It could take 30 days after you purchase flood insurance for the policy to be effective. Don’t wait until a major storm is approaching to purchase this valuable coverage.
Don’t be mistaken in thinking that you are safe from flooding just because you don’t have a coastal home. To learn more about flood insurance and how it can protect your home, contact Eastern Insurance. Eastern Insurance represents more than 20 insurance companies that provide comprehensive coverage for your personal needs at competitive prices. To learn more, get in touch with a member of our personal lines customer service team by either requesting a quote online, by calling 800-333-7234 (Option 2), or by emailing us at firstname.lastname@example.org.
Learn more about flood insurance at https://www.floodsmart.gov/