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Talk
with Brown Thayer Shedd to Understand your Flood Profile
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About 200 insurance companies, possibly including the company that already handles your homeowners or auto insurance, write and service flood insurance policies for the government, which finances the program through premiums.
Although flood insurance is relatively inexpensive, most Americans neglect to purchase protection. Only about one-quarter of the homes in areas most vulnerable are insured against flood loss, according to the Federal Insurance Administration (FIA). In those areas, flooding is 26 times more likely to occur than a fire during the course of a typical 30-year mortgage.
More than 19,000 communities have agreed to stricter zoning and building measures to control floods, according to the Federal Emergency Management Agency (FEMA). Residents in these communities are entitled to purchase flood insurance through the National Flood Insurance Program (NFIP), a program FEMA oversees.
For more information on the National Flood Insurance Program and for a
copy of the 2005 manual, visit this website, http://www.fema.gov/nfip/manual05_05.shtm.
Purchasing your policy
The average flood insurance premium in 2000 was $353 a year, with policies starting at $112 per year. The average amount of flood insurance purchased in 2000 was $124,089. Policies are available in three forms: "Dwelling" (most homes); "General Property" (apartments and businesses); and "Residential Condominium Building Association Policy" (condominiums). All have limits on coverage.
What coverage is available?
As a homeowner, you can insure your home up to $250,000 and its contents up to $100,000. If you're a renter, you can cover your belongings up to $100,000. As a non-residential property owner, you can insure your building and its contents up to $500,000.
In general, a policy does not take effect until 30 days after you purchase flood insurance. So, if the weather forecast announces a flood alert for your area and you go to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood.
A flood insurance policy is easy to get, affordable and offers invaluable peace of mind. With flood insurance, you know you're covered … and when the water rises… that peace of mind is helpful.
Living on the shoreline? It'll cost you
If your home sits between the mainland and often-stormy, Long Island Sound, you might not be eligible for federally subsidized insurance. The government limits its liability by excluding property owners in such areas as the North Carolina Outer Banks, sections of the Florida panhandle, and selected areas in Delaware and South Carolina. The reason stems from the Coastal Barrier Resources Act, which is designed to protect wildlife living in valuable ecological areas. The government discourages development by withholding subsidized insurance.
Also, a study released by the FEMA on June 27, 2000, reported that close to 87,000 homes and buildings have been built on land likely to wash away during the next 60 years.
Some insurance companies are willing to expose themselves to higher risks and take on policies in some of the developed barrier areas. Instead of $340 in premiums offered through the government program, a few private companies will charge about $3,000 a year for flood coverage of slightly less than $200,000.
An Ounce of Prevention…
When your insured home is in extreme danger of being flooded, you may receive up to a $1,000 reimbursement for your damage-preventing expenses. Things like renting storage space to protect your belongings, buying sandbags and lumber to make a barricade, and renting pumps are all things that qualify for reimbursement. No deductible is applied to this coverage.
Contact Brown Thayer Shedd for more details on Flood Insurance.
