A flood insurance policy covers damage to your home, business or property incurred when rising water enters the home or business. The National Flood Insurance Program, a federal program, underwrites this policies.
Who Buys NFIP Insurance?
Both homeowners and renters, plus business owners buy this insurance to protect their structures and/or belongings from flood damage and loss.
NFIP makes its insurance available to those in communities that “”adopt and enforce floodplain management regulations.”” Carrying this insurance reduces the social and economic impact of floods by providing a ready source of rebuilding funds and money to replace lost personal items. Government assistance through agencies like the Federal Emergency Management Agency, does not cover rebuilding or replacement costs. It also only becomes available in cases of a Presidential disaster declaration.
The federal government maps all floodplains. It designates risk levels of flood and maps these, as well. If your home or business lies in a high-risk area, your bank requires you to carry this insurance while you have an open mortgage.
These insurance policies cover damage from rising water floods as the result of rain or thunderstorms, hurricanes, tropical storms, snowstorms, mudslides, and other causes. For example, if hail from a hailstorm broke windows in your home and rains from a storm following it flooded your living room, this insurance covers it.
NFIP provides online assistance to those who need to file a claim. For instance, it provides an instructional page on filing a claim for insurance purchasers who were impacted by Hurricanes Harvey and Irma.
Flood policies let you tailor the policy to your needs. You can obtain a policy to cover a structure only, contents only or both structure and contents. While homeowners favor a structure and contents policy, an apartment renter chooses a contents only policy. A real estate investor who purchased a property to flip only needs to cover the empty structure. A business might purchase a policy to cover its structure and contents, plus obtain additional contents coverage for stock warehoused elsewhere.
Each policy includes a 30-day waiting period before coverage becomes active. Buying a policy due to an oncoming storm won’t result in coverage. Buy well in advance of storm season.
Although the federal government created the insurance program, local insurance agents sell the insurance. NFIP insurance protects you from water damage from numerous causes. Floods occur in every US state. Insurances ensures you’re prepared to weather the storm.