August 19, 2016–Teric Steines, CISR
As the most common natural disaster in the country, flooding ruins millions of dollars of homes and property every year. Flood insurance is not commonly covered in your typical homeowners insurance policy, making it necessary to purchase additional coverage for this costly, devastating disaster. Additionally, while it can be purchased any time, the policy may not take effect for 30 days.
If you are in a high-risk flood zone, a federally regulated lender will require a would-be borrower to buy flood insurance in order to qualify for a mortgage loan. To satisfy the lender, flood insurance must be purchased in an amount that sufficiently covers the loan. A homeowner should also buy flood insurance if they reside in a flood plain with no failsafe controls, such as a dam. However, if you are not in a high-risk zone you must assess whether this coverage makes sense for your situation. In other words, just because flood insurance isn’t required to secure your home mortgage, it doesn’t necessarily mean you don’t need the coverage.
Many homeowners mistakenly assume that if the area they live in is destroyed due to flood, they will get government assistance. While it is true that funds can be made available to homeowners if the event qualifies, the President needs to declare the area a disaster. And even when the President grants this status, most of the funds are distributed as loans that must be paid back at a later date.
Flood insurance can ensure you have the right coverage when you need it most
Flood policies even pay off if the area is not declared a federal disaster, which can prove to be invaluable to you. Because such a declaration is rarely issued, protecting yourself is extremely important. Besides, since you have to repay the federal aid you receive for home repairs related to a natural disaster, providing your own protection is the only way to ensure financial recovery after flooding occurs.
Not all homes qualify for flood coverage. For instance, flood insurance for beachfront property may not be available for the obvious reasons. However, the Federal Emergency Management Association (FEMA) reports that more than 19,000 communities have agreed to tighter zoning and building measures to control floods. Because of these agreements, residents of these communities can buy flood coverage from the National Flood Insurance Program (NFIP), which FEMA oversees. NFIP has 4.4 million flood policies nationwide.
How else can you protect yourself from flood damage?
Floodsmart.gov recommends the following measures to minimize losses due to floods:
- Take photos or videos of all of your important possessions. If your home is damaged in a flood, these documents will help you file a full flood insurance claim.
- Store important documents and irreplaceable personal objects (such as photographs) where they won’t get damaged. If major flooding is expected, consider putting them in a storage facility.
- Post emergency telephone numbers in your home. Teach children to dial 911.
- Plan and practice a flood evacuation route with your family.
- Ask an out-of-state relative or friend to be the “family contact” in case your family is separated during a flood. Make sure everyone in your family knows the name, address, and phone number of this contact person.
- Buy and install sump pumps with back-up power. (See our article, “6 steps for sump pump and water damage protection.”)
- Hire a licensed electrician to raise electric components (switches, sockets, circuit breakers and wiring) at least 12″ above your home’s projected flood elevation.
- Install backflow valves or plugs for drains, toilets, and other sewer connections to prevent floodwaters from entering.
- Anchor fuel tanks. An unanchored tank in your basement can be torn free by flood waters, and the broken supply line can contaminate your basement. An unanchored tank outside can be swept downstream, where it can damage other houses.
- Elevate your washer and dryer, if they are in the basement, on masonry or pressure-treated lumber at least 12″ above the projected flood elevation.
- Place the furnace and water heater on masonry blocks or concrete at least 12″ above the projected flood elevation.
The right coverage and a few preventative tips can help you manage the consequences of flooding. For more information about flood insurance, contact us.Share