What to Know About Your Flood Insurance

With the severe storms ravaging the entire Northeast, all call centers are being flooded, no pun intended, by the thousands of victims along the Atlantic. They are upset, scared, and confused, as would anyone in their circumstances. They want to know what their insurance company can do for them, they want their properties repaired immediately. It is important to understand exactly how your insurance works and what is protected by that coverage. You have to read the fine print, especially in insurance policies. If you do not have questions for your agent, then perhaps you are a little naive. You need to have a crystal clear explanation about your flood coverage.
Requirements for flood insurance

You have to be eligible for a National Flood Insurance Policy(NFIP). A standard NFIP applies to any residence, rental, or business property found in Special Flood Hazard Areas. These areas are shown on Flood Hazard Boundary or Flood Insurance Rate Maps(FIRMS), which are determined by the Federal Emergency Management Agency(FEMA). FEMA identifies and maps areas by conducting flood hazard studies and publishing FIRMS. These are based on a 1% annual chance flood, meaning they only have 1% chance of a flood of the same size or larger happening in any one year. It also provides coverage to properties in a low to medium risk area, not eligible for a Preferred Risk Policy. The costs of these policies depend on your flood zone risk area.

To qualify for a Preferred Risk Policy, you need to own a one to four family home in a low to medium flood hazard area that has to meet certain criteria. Based on the date your home was built, not how long you own your home, if your home has had any of the following events happen, you are not qualified for a Preferred Risk Policy.
1)The home has had two or more loss settlements of $1,000 or more
2)Three or more loss settlements, regardless of the amount
3)Two federal disaster payments, each of more than $1,000
4)Three federal disaster payments, regardless of the amount
5)One flood insurance claim payment and one flood disaster relief payment (including grants and loans), each for more than $1,000You can also qualify for an Excess Flood Insurance Policy, if you need more than you are currently allotted with your NFIP. To do so, you must contact your local property and casualty agent or agency to determine what type of policy you may qualify for.

The Coverage

NFIP's and Preferred Risk Policies include building, contents, and replacement cost coverage.

1)Building coverage protects the structure, including appliances and items considered part of your home.
2)Content coverage protects your personal belongings and certain structural damages.
3)Replacement Cost Coverage protects your home's rebuilding cost. For this coverage, you must have insured, at least, 80% of the replacement cost or the maximum cost available, whichever is less.
Contact your local property and casualty agent or agencyfor a complete list of what is covered.

What is the maximum insurance value for your policy?

The NFIP can be insured up to $500,000 for a non-residential building and $250,000 for any single family dwellling and can insure up to $100,000 for your personal belongings.
A Preferred Risk Policy can insure up to $250,000 for any single family and $60,000 for personal belongings.

I cannot reiterate this enough. Contact your local property and casualty agent or agency for full details on how these flood insurance policies can help you and where they will provide your maximum protection.
Once you reach the maximum payable limit, you will not get any more, unless you had previously purchased an additional flood insurance policy. Another important thing to mention is that you cannot protect everything. Outdoor amenities will likely not get covered, but you do need to contact your local property and casualty agent or agency to determine what is and is not covered. It only takes one misunderstanding to destroy your current lifestyle. Try to voice all your concerns to them.