When buying homeowner’s insurance you may want to consider adding flood insurance to your policy. Flooding insurance can help give you that additional protection in areas prone to flooding or floods from manufactured sources. If you are unsure if you should invest in flood insurance, InsureWise LLC will break down flood insurance and how it works.
What is Considered a Flood for Insurance?
Flood insurance is a policy that helps homeowners more easily recover from flood damage to their home and personal property. Flood insurance often covers natural disasters or manufactured disasters such as a backed up sewer line, broken pipes or appliances. Even if you do not live in an area that receives heavy rain, you never know when a pipe or an appliance will misbehave and result in a major flooding. There are some people who may assume flood protection is already applied to their homeowners insurance. However that is not the case. Flood insurance is an additional policy you can add.
What is Covered By Flood Insurance?
Most flood insurance policies, including private insurance companies, will often follow the National Flood Insurance Program. There are two standard types of coverage that has its own deductibles.
• Building Coverage: This policy coverage pays for damages to the home’s electrical and plumbing system, hot water heater, furnace, foundation walls, built-in appliances and permanently installed cabinetry. Building coverage can be purchased up to $250,000.
• Content Coverage: This policy type coverage pays for damage to personal content such as clothing, furniture, some appliances, curtains, artwork, and etc. However, Content Coverage can only cover up to $100,000.
The coverage is based on an “actual cash value” which means you will get a payout of the current worth of the items and not the worth of new items.
What is Not Covered By Flood Insurance
As each company varies on what they will and will not cover in their own flood insurance policy, you must carefully read through the policy to fully understand what will be covered. However, in general there are certain things that will not be covered in a flood insurance policy. Some example that a flood insurance policy may not cover are:
• Swimming Pools or Spas
• Decks, Patios, or Pergolas
• Valuable documents or Money/Currency
• Personal Items in Basements
Flood insurance also will not cover expenses that include hotel or apartment rentals if you need lodging while your home is being repaired. Vehicles are also excluded from most flood insurance policies as well.
Is Flood Insurance Really Necessary?
The decision to get flood insurance is always a gamble. There are certain things to consider. For example, do you live in a high risk flood zone? If you live in an area that is a high risk, you would be wise to seek flood damage protection. What is the chance of your home flooding from internal plumbing sources? For example, what is the quality of the home when it was constructed and how old is the home. Older homes are prone to developing problems with its electrical and plumbing system. If you live in a poorly constructed home, an older home or in a flood risk zone, you would be wise to get flood insurance.