Flood Insurance: Does Your Policy Have a Pulse?

Across any type of insurance, you want to make sure that you get paid out. In this video, we want to answer the question, does your flood insurance policy have a pulse? Will the policy really payout when flooding happens and when you file a flood claim?

The risk of flooding has drastically increased over the past few years. You can blame it on climate change or maybe insufficient flood mitigation efforts, but one thing stays the same: flood damage takes away a lot from us and leaves us with flood losses. These losses can really make or break your way of life as we've seen a lot of people who didn't carry flood insurance in minimal flood risk zones devastated due to these losses from a flood.

This happens in low-risk areas where the chance of flooding is very low, but never zero. We've seen homes just be left with impacted debris and all those things and never get a chance to be repaired. So, when you're carrying a flood policy, it begs the question will it pay out when flood claims are filed?

There are multiple occasions as well where flooding or disaster like a storm happens and the homeowners didn't have enough coverage like maybe contents coverage, so all they're left with are repairs for property damage since the policy listed the residential property insurance and not the contents. Some even thought that the homeowners insurance will provide insurance coverage for these losses on personal property when in fact they're not. They may be included when it comes to water damage, but not from flooding.

So this is what we mean by checking if your flood policy has a pulse. You want to make sure that your insurance company has you covered regardless of it's federal flood insurance from the National Flood Insurance Program (NFIP) and Federal Emergency Management Agency (FEMA) or private flood insurers. You want to check as a flood insurance policyholder what flood coverages you have. Always make sure that you know what things have flood protection from these policies and generally how much do they cover and if it's going to be adequate protection from flood loss.

For example, your home might have a $400,000 market value when the NFIP only provides coverage for only $250,000. That's a big downgrade after the flood claim and the necessary repairs are being done. 

Another thing that homeowners think will be covered is additional living expenses. Now, there are insurance companies that will cover this especially when it comes to private insurers, but the NFIP or FEMA doesn't provide this additional coverage. So, the policyholder will have to pay everything out of their own pocket. 

Lastly, we're going to talk about the eighty percent rule when it comes to replacement coverage from the Private Insurers. This means that you want to make sure that your policy is written to provide adequate coverage of 80% for replacement costs.

Replacement costs are generally included with your private flood insurance, but you want to make sure that it has enough coverage for flood losses on contents. If you don't do this then it's very likely that the coverage will default to actual cash value which generally just gives you garbage since it won't give you back what you lost.

As flood insurance rates start becoming higher, the cost of flood policies becoming more expensive, and high-risk flood zones and high-risk areas like the special flood hazard area (SFHA) get deeper inland, more frequent hurricanes, stronger storms, higher water levels, and urban flooding becoming more common, you want to make sure that you have the right protection from these.

Our homes are the place where most of us feel the safest and this is where our loved ones stay too, so you want to be sure that when it comes to your flood insurance, it's going to have a strong pulse to protect you from all type of flood risks.

If you have any questions on flood insurance coverage, rates for policies, the private market, private flood premiums, how much risk of flood do you have in your area, flood maps, or anything about flood, reach out to us. Remember, we have an educational background in flood mitigation and we want to share this with you, so you too can avoid risk for flood losses and protect the value of your properties long term. Click the links below to get started.