What is Flood Insurance?
Flood insurance covers damage caused by rising water. Floods can happen anywhere, anytime–not just in coastal areas or near lakes and rivers. Torrential rain, snowmelt, mudflow, dam failures and inadequate drainage systems can all cause flood losses.
There are two types of flood policies: Preferred and Standard. The flood hazard zone you live in determines the type of policy you should buy. If your property is located in a low risk zone, you may qualify for a Preferred Risk Policy, making you eligible for coverage at a lower rate. Low risk policies start as low as $119.
Who Needs Flood Insurance?
The threat is real and flood insurance should be a consideration for all homeowners regardless of where you live. Remember, “low risk” does not mean “no risk”–almost 25 percent of all flood insurance claims come from areas with minimal flood risk. The average flood claim payment is $33,000. The federal government requires mortgaged properties in Special Flood Hazard Areas (SFHA) to be insured against flooding. And the rates are set by the government, so they are the same regardless of the carrier you choose.
Bankers is a Write Your Own (WYO) authorized carrier for the National Flood Insurance Program (NFIP).
Basic building coverage is available up to $250,000. It pays to repair or replace the insured building and its foundation, electrical and plumbing systems, central air conditioning, furnaces and water heaters, refrigerators, stove and built in appliances and most permanently installed items in your home. For more detail see floodsmart.gov.*
Contents coverage is available up to $100,000. It is not automatically included in a flood policy. You need to add it, and we recommend that you do so. Contents coverage provides payment for the contents and personal belongings within your home. This includes things like clothing, furniture, electronic equipment, curtains, portable appliances and larger removable appliances such as washers and dryers. There are some exclusions, so discuss this coverage with your agent.
There is a mandatory 30 day waiting period on new flood policies with a few exceptions like a loan closing or a recent flood hazard map change.
Excess Flood Insurance
Like the Standard and Preferred Flood Insurance policies, Excess Flood insurance provides protection against damage caused by rising water. The difference with Excess Flood insurance is that you can purchase coverage over and above your Standard or Preferred Insurance policy, so that you are more fully covered in the event of a flood claim. In order to be eligible to buy an Excess Flood Policy, there are two conditions that must be met:
- Your Standard or Preferred Flood Insurance Policy must be provided by the National Flood Insurance Program (NFIP) or a company like Bankers that is a Write Your Own (WYO) carrier.
- Your property must be insured for the maximum limits available from the NFIP/WYO.
The Excess Flood policy deductible is actually equal to your Standard or Preferred Flood Insurance policy coverage limit. This means that the damage to your property must be greater than the maximum coverage allowed by the NFIP in order for the Excess Flood policy to come into play. No further deductibles apply.
An Excess Flood policy provides coverage for a single building. Contents coverage is optional. Itemized or scheduled property coverage is not available.
Dwelling coverage is available up to $2,000,000. Optional Contents coverage is available up to $100,000. All limits are in excess of the primary NFIP/WYO flood policy. Eligible types of property include:
- 1-4 family dwellings, tenant or owner occupied
- Residential condominium units and their household contents, except residential condominium buildings that qualify for the Residential Condominium Building Association Policy (RCBAP). Verify your situation with your condominium association
- Owned individually or by a corporate owner
The policy term is 12 months; however, it must line up with the underlying flood policy, so the term may be longer or shorter to adjust the Excess policy to the Flood policy expiration date.
Excess Flood insurance can be confusing. If you’re unclear on any of the above explanations, your Bankers agent will be glad to help.
Living in a CAT State?
You Want Catastrophe Experience When You Need It
Those of us who live in a “CAT State” – a catastrophe-prone state – know that being prepared is key. This includes having the right insurance coverage. That said, one of the most important considerations in selecting an insurance company – especially if you live in coastal states – is catastrophe experience. Bankers has weathered an impressive 40+ catastrophes and offers exceptional customer service and claims response time. You don’t want to think it can happen to you, but, in the event of an emergency, you want an insurance company that knows precisely how to meet your needs. Remember, you can buy Earthquake and Flood Insurance separately. These two important risks are not covered in your basic homeowners policy.
Flood Elevation Certificates
A Flood Elevation Certificate is an important tool of the National Flood Insurance Program (NFIP) used to certify building elevations in Special Flood Hazard Areas. The Certificate is used to help determine proper flood insurance premium rates and as supporting documentation for flood map revision requests. Elevation Certificates are completed by a licensed land surveyor, engineer, architect or designee of the State.
Ready to Speak to an Agent?
Insurance is complex and you need professional advice you can trust. We partner with top quality independent agents who can help guide you through the purchasing process. There are many things you should be asking your agent prior to purchasing insurance for your home or business. Below, we’ve listed a few questions you might not have considered.
First, be prepared before you visit your agent. Do an inventory of your home or business. You may be surprised how much you really have. Visit fema.org.*
Below are a few of the types of questions your agent can answer:
- Does my lender require flood insurance? Am I in a special flood hazard zone (starts with letter “A” or letter “V”)? Remember, everyone is in a flood zone!
- How much flood coverage do I need?
- What is Umbrella Insurance and is it just for the wealthy?
- Do I need special coverage for an in-home office?
- I collect antiques and jewelry. How do I get this covered?
- Do I need employment practices liability insurance and what does it cover?
- Is my company required to maintain workers compensation coverage?
- What will happen if I cannot operate my business?
- I conduct business out of state. Is my electronic information protected?
- What is identity theft and is there a way to protect myself from it?