The most prevalent natural disaster in the United States is flooding, and Hurricane season is now among us. Flooding is the most expensive natural disaster, costing homeowners, insurers, and the government billions annually. You may be faced with financial devastation without adequate flood insurance coverage.
Flood damage is not covered by standard home insurance policies. Therefore, a separate flood insurance policy is needed. This policy also has separate deductibles for the building and its contents, and you decide on the deductible amount. Higher deductibles mean lower premiums, but with a mortgage, a lender may specify limit maximums.
Note that government flood insurance doesn’t kick in immediately after a disaster. There is typically a 30 day waiting period to prevent you from purchasing a policy as a storm heads your way. Private policies will typically be costlier than federal plans. However, most private insurers allow installment payments and don’t require a waiting period for coverage to start. Plus, most also offer replacement cost for personal items, instead of actual cash value, which is lower.
What Does Flood Insurance Cover?
Keep in mind that homeowner’s insurance does not cover flooding damage, and you will need separate insurance to cover losses due to flooding or flood-related erosion caused by heavy or prolonged rain, snowmelt, coastal storm surges, blocked storm drainage systems, levee dam failure, and similar events. Flood insurance will cover structural damage, including:
- The insured building and its foundation.
- The electrical and plumbing systems.
- Central air-conditioning systems, furnaces and water heaters.
- Refrigerators, cooking stoves and built-in appliances like dishwashers and trash compactors.
- Permanently-installed carpeting and flooring.
- Permanently-installed paneling, wallboard and built-in bookcases and cabinets.
- Window blinds and shutters.
- Detached garages (up to 10% of structural coverage).
- Debris removal.
Personal property coverage will include:
- Clothing, furniture and electronics.
- Curtains and window treatments.
- Portable and window air-conditioners.
- Portable microwave ovens, dishwashers and other small appliances.
- Clothes washers and dryers.
- Food freezers and the food in them.
- Valuables like artwork, jewelry and furs (up to $2,500).
To protect yourself and your belongings, it’s important to determine if you need additional coverage. Ask your insurance agent if you’re eligible to purchase excess flood insurance, which is offered by private insurers.
Who Needs Flood Insurance?
This coverage is not only needed for those in designated flood zones. In fact, most flood insurance claims come from those outside of flood zones.
Mortgage lenders mandate homeowners in designated flood plains to obtain flood coverage. Even if you’re not required to buy flood insurance though, it is such an important protection to consider.
The reality is that everyone potentially lives in a flood zone. Without proper protection, if a flood strikes, the recovery funds will come from the federal government’s low-interest loans, which must be paid back. Obtaining a flood insurance policy is the only way to protect yourself from flood-related costs completely.
Filing a Claim
The steps of filing for flood insurance include:
- Contact your insurer as soon as possible, as all flood insurance policies require you to give timely written notice of loss.
- Separating your damaged and undamaged property. (Never dispose of anything before an adjuster has seen it, unless required by law).
- Compiling a list of damaged personal property.
- Specifying structural damages.
- Completing a Proof of Loss statement containing the information required by your flood insurance policy within 60 days after the loss.
You can begin to collect payment when you and the insurer agree on the amount of damages and after you received your signed Proof of Loss for your claim. Texas often gets hit hard with storms, and since this is hurricane season, it is all the more reason to discuss with your insurer how you can stay protected with Texas flood insurance. Keep in mind that you will not get coverage for most mold, mildew, or moisture damage if it is found that you could have prevented it.
About Transparity Insurance Services
Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.