Aveneu Park, Starling, Australia

When still recommended. In fact, floods are one

When
it comes to understanding flood insurance, it’s not always easy. It can take
many years to learn all of the ins and outs of the insurance business, so it’s
completely understandable when the average homeowner has questions.  And while we can’t answer all of your
questions in one article, we can do our best to answer some of the most common.
Here are 10 common questions in regards to flood insurance:

1)
Why do I need flood insurance?

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Unfortunately,
homeowners insurance does not cover flood damage. Flood insurance must be
purchased as a separate policy. In the event of a flood, you will need this
coverage to pay for any damages that are incurred. In certain areas that are
considered high risk, flood insurance may be a requirement by mortgage lenders.

2) I
don’t live near water, do I need flood insurance?

As
just mentioned, in some high risk areas flood insurance may be a necessity. In
other lower risk areas, such as those away from water, insurance may not be a
necessity but is still recommended. In fact, floods are one of the most common
types of natural disasters, and even a few inches of water can cause thousands
of dollars in damage. In addition, floods are not always caused by lakes and
oceans. Floods can also be caused by things like hurricanes and snowmelt. So
even if you don’t live near water, you could still be at risk.

3)
What are the different coverage options?

When
it comes to flood insurance, you can purchase it for the structure of your
home, your personal property, or both. When choosing a policy for only the
structure of your home, it is important to know that your personal property
will not automatically be covered. If you wish to have personal property
covered, you need to name it and state it within the policy itself.

4) I
thought federal disaster assistance paid for flood damage?

It
does, but only if an event has been Presidentially declared a natural disaster
– and this is a rarity. In fact, over 90% of natural disasters are not Presidentially
declared. This means that 90% of natural disasters are not covered. In
addition, government assistance in such cases is not actually free. Financial
assistance is given as a loan which must then be paid back. Flood insurance, on
the other hand, will cover your damages regardless of whether an event has been
presidentially declared or not.

5)
Does flood insurance cover my basement/crawl space?

When
it comes to basements (or any type of floor below ground level), some
limitations apply. These limitations may differ depending on the agency you are
working with. When it comes to this topic, it is best to ask your insurance
agent what is and what is not covered in regards to your basement.

6) Do
I need flood insurance if I am a renter?

It
is important to remember that in the event of a flood, there is more than the
structure of your home at risk – so is your personal property. Therefore, it is
still important to have flood damage coverage to cover your personal belongings
should they become damaged in the event of a flood. Another good reason to have
flood insurance is in case you need to vacate the property during repairs. In
such a case, flood insurance can help to pay for your alternative
accommodations.

7)
What does flood insurance actually cover?

The
exact coverage of your flood insurance will depend on your policy. With that
being said, flood insurance often covers any direct physical losses that have
been caused by a flood. Losses may also be covered in the event of high waves,
severe storms, and tidal surges. As mentioned previously, there are limitations
on what flood insurance will cover in regards to basements so double check with
your insurance agent if you would like to know more details.

8)
How long does it take to get flood insurance?

While
there are some exceptions to the rule, there is typically a 30 day waiting
period for flood insurance to take effect. The reason for this is so that
people cannot obtain flood insurance just as the expectance of a flood is being
announced. There are some exceptions to this rule, the main one being if you
are making, increasing, renewing, or extending your loan. Other exceptions can
be explained in further detail by your insurance agent.

9)
How do I know if I am in a flood zone?

Call
your town. Most towns have maps and elevations certificates related to each
specific house. Another option would be to ask your insurance broker and have
them review the maps for you.

10)
Is flood insurance expensive?

Flood
insurance is affordable, and less than you might expect. With that being said,
the actual cost of insurance will vary depending on which flood zone you are
in. Obviously, those who are in higher risk zones will spend more on insurance
than those in low risk zones. If you are in a high risk zone, the elevation
level of your house may also influence the cost of insurance.

If
you have any additional questions about flood insurance, ask a local insurance
agent. And remember – no question is a bad question. Insurance is a complicated
business and it’s the job of the agent to help you understand it!

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