With all the recent flooding in Texas, Florida, and other states, many people are wondering about flood insurance for their homes.
Water can enter your home in a variety of ways. If there’s a heavy rainfall, it can get in through the roof. It can also come at or below the level of the ground, which is how true floods happen. If you live near a body of water, be it a river, lake, or ocean, and it overflows, flooding occurs. A flood may include heavy surface runoffs, foundation damage, and sewer clogs.
The only way to avoid the risks of flooding completely is to live away from any body of water or high in the mountains. Even then, you just never know what may happen. If, however, you live in a state, such as Florida, or in an area similar to the Jersey Shore in New Jersey, you have to deal with the risks of floods.
You can significantly reduce the risks of basement flooding by investing in gutters and landscaping. You can also invest in a sump pump system. A sump pump system removes water from the water collecting unit typically installed in a basement. The water usually enters the unit through the perimeter drains that are a part of the basement waterproofing system. If you want protection from sewer clogging, install a one-way valve that lets sewage flow out of your home, but won’t let it flow back in.
In the United States, there are only two types of insurance that can help you get protection from floods. Neither type of insurance covers the risks completely.
Sump Pump System Insurance
You can add this insurance to your regular homeowner’s insurance. Buy this coverage for the smallest value out of the following two: biggest potential loss and biggest coverage available.
Protecting yourself from a malfunctioning sump pump system is much better than any alternative you have available, which is why you may want to consider installing a backup system for your primary sump-pump system. If you don’t have or can’t buy sump-pump insurance, at least get sewage malfunction protection coverage.
Both sump pump and sewage backup insurance policies vary significantly from one insurance company to the next. Typically, your policy covers water damage and the cleanup. The sump pump coverage applies even if the failure of the system occurs because of a power outage. What you need to understand about these types of insurance is that they do not apply to true floods, such as the ones that occur during hurricanes in the southeastern United States.
You want to avoid companies that offer watered-down versions of insurance policies with long lists of exclusions and extremely high deductibles.
Contact State Farm or Farmers for specific information regarding such insurance.
National Flood Insurance Program (NFIP)
This program exists because a regular homeowner’s insurance policy doesn’t cover flooding that occurs as a result of heavy rains. To help people stay protected, the U.S. government took on the role of an insurer. It offers flood insurance through participating insurance companies that act as an agent of the government. Insurance that is a part of the NFIP start at as little as $119 per year. The only eligibility requirement is that your home is located in a community that chooses to be a part of the NFIP.
NFIP insurance doesn’t cover just any flooding. To qualify for a payment from NFIP insurance, the damage needs to occur at two or more adjacent properties or one property if it is larger than two acres. This means that if you have a property of fewer than two acres and get damage from rain flooding and your neighbors don’t, you won’t get a payment from NFIP insurance.
There are two types of NFIP insurance. The first one is emergency NFIP insurance. This insurance is for communities that are in the process of applying to join the NFIP, but aren’t a member yet. The goal of the emergency insurance is to allow homeowners to get at least partially covered while they are waiting for their community to be accepted into the program.
In the emergency program, premiums are higher and coverage may be hard to get. The maximum available coverage is $10,000 for valuables inside the home and $35,000 for the home. If you live in an area with a high risk of flooding, such as South Florida, you want to get whatever insurance is available as quickly as possible and upgrade your maximum as quickly as you can, which typically can happen when your community becomes a full member of NFIP.
The regular NFIP program is for homeowners who own homes in communities that are full NFIP members. The maximums are much more reasonable compared to the emergency option. They are $100,000 for valuables and $250,000 for homes.
Here’s what you really need to know about NFIP insurance. There is a 30-day gap period between the date you apply for the insurance and the date your insurance policy kicks in. For this reason, you want to apply for flood insurance as soon as you can after you purchase a property. There are two separate $500 deductibles that apply to homes and contents, which means that the total deductible amount is $1,000.
If a flood happens, you are paid on calculated depreciated costs, not replacement costs. You may not be able to get coverage for your basement, with basement defined as a space within your home that has all four sides below ground level. The NFIP flood insurance policy does not cover basement walls, floors, or ceilings. It may cover large appliances and equipment, such as water heaters, air conditioning systems, washers, and dryers.
Do you have flood insurance? Do you know what it covers? If not, go to www.floodsmart.gov and learn more today.