What Is It?
Flood Insurance is designed for all properties whether it is a business building or personal home. This policy solely to help reduce out of pocket expenses in the event of a flood loss. This federally regulated program has specific coverages as well as guidelines in determining whether flood insurance would be applicable to your loss or homeowners insurance. It is a common misconception that flood insurance is included in your homeowners policy and referred to as “water damage” but this is not the case.
Since Flood insurance is federally regulated and administered by FEMA, it is a separate policy that has isolated limits and deductibles than your property policy as well as different coverage inclusions/exclusions and guidelines. Flood insurance can be caused by a variety of water sources such as tidal waters, unusual and rapid accumulation or runoff of surface waters by any source such as a swimming pool or lake. Generally, a flood is solely considered rising water from the ground up and must effect two or more properties or two or more acres of land.
Why Is It Important?
There is a multitude of reasons to purchase flood coverage ranging from cost to lender requirement. Those purchasing a new property or re-financing, could be required to purchase a separate flood policy should the property be deemed in a required flood zone. These “high risk” zones, according to FEMA maps, are more susceptible to flooding. Properties that are located in a “preferred risk zone” have the choice to carry coverage however it is still highly recommended as the majority of all flood claims are generated from preferred risk or low risk zones.
How Much Coverage Is Needed?
A standard flood insurance policy within a required flood zone would usually match your hazard insurance coverage however for those located in low risk zones, package policies or “preferred risk policies” have many options when determining how much coverage you are comfortable with carrying. FEMA standard flood insurance policy maximum limits are $250,000 dwelling/$100,000 personal belongings however should you choose to carry higher limits, there are excess flood policies available as well as lower limits depending on what fits your needs.