Why do I need Flood Insurance Coverage?

Many homeowners don’t realize that their regular homeowners policies will not cover flood water damage. Your homeowners insurance will pay for water damage due to broken pipes, but not a flood. Flood insurance pays for damages caused by the rising of a body of water that covers land that is normally dry.

In 1968, Congress mandated federally regulated and insured lenders to require flood insurance on homes and properties that are in areas at higher risk of flooding. In some cases mortgage lenders require flood insurance even if you are not in a high risk area.

When you are considering a home, property, or business, you need to know if the property is in high risk area and, if so, determine just how much coverage you will need to protect your home and family. In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage.

Am I required to have Flood Insurance?

Homes and businesses in moderate-to-low risk areas are typically not required to have flood insurance. However, as a homeowner you need to be aware that even though you may not be federally required to have flood insurance, if you are caught off guard and without flood insurance, the results could prove to be a devastating financial blow, not to mention the emotional stress. Changing weather patterns have proven that anyone can be vulnerable to floods.

Facts from the National Flood Insurance website show that 20% of flood insurance claims come from people outside of mapped high-risk flood areas and receive one-third of Federal Disaster Assistance loans for recovery from flooding. A lender can require flood insurance even if it is not federally required.

Different flood insurance rates apply depending on the flood zone and possibly your home’s elevation. For more detail please contact your insurance agent.

How does Flood Insurance differ from Homeowners Insurance?

A flood insurance policy provides the specialized coverage you will need to protect your home or business from flood waters. Too many people find out too late that their property insurance does not cover flood damage. An example of this is that damage caused by a sewer backup is only covered by flood insurance if it’s a direct result of flooding. The damage is not covered if the backup is caused by some other problem. Bottom line – it’s important for you to know that you have the coverage you need before disaster strikes.

 

What is covered by a Flood Insurance Policy?

The Standard Flood Insurance Policy provides coverage for one building per policy. The only exception is 10% coverage for a detached garage. However, the total payment for flood damage to the detached garage and the house together cannot exceed the building policy limit. For coverage to apply, the garage can only be used for parking and storage. Any other use would void this coverage, i.e. if the garage has a workshop, the coverage would not apply. All other buildings on the premises need separate coverage.

  • The structure of your home and its foundation
  • All of the electrical and plumbing systems
  • Your A/C equipment, gas furnaces and water heaters
  • Kitchen appliances including refrigerators, stoves and built-in appliances such as dishwashers
  • Installed carpeting over unfinished flooring
  • Paneling, wallboard, bookcases and cabinets
  • Bathroom fixtures such as sink, toilet and shower or tub including fixtures
  • Detached garages (in most cases)
  • Removal of property debris

Contents are not automatically included in your flood insurance coverage. To cover the contents of your home you will need to name the specific amount of coverage that is desired and a separate premium will be charged. Contents coverage does not require a second policy and is simply added to the same policy.

Contents coverage limits are $100,000 for residential policies and $500,000 for commercial policies. Actual Cash Value (ACV) is the cost to repair or replace an insured item at the time of loss, less physical depreciation. The value of physical depreciation is based on the age and condition of the item. Personal property is always paid at ACV. Personal property coverage includes items such as:

  • Furniture and electronic equipment
  • Curtains
  • Portable and window air conditioners
  • Portable microwave ovens and portable dishwashers
  • Rugs and Carpets not included in building coverage
  • Washers and dryers
  • Food freezers and the food in them
  • Certain valuable items such as original artwork or heirloom jewelry

Items NOT covered by your Policy

  • Damage caused by moisture, mildew or mold that could have been avoided or mitigated
  • Currency, precious metals and valuable papers such as stock certificates
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools
  • Living expenses such as temporary housing
  • Financial losses caused by business interruption or loss of use of insured property
  • Vehicles such as cars, motorcycles and recreational vehicles
  • Detached buildings (other than garages) require a separate building property policy

Elevated Homes and Basement Areas

Coverage is limited in areas below the lowest elevated floor, depending on the flood zone and date of construction. These areas include:

  • Basements
  • Crawl spaces under an elevated building
  • Enclosed areas beneath buildings elevated on full-story foundation
  • Enclosed areas under elevated buildings

We can help you determine exactly how much flood insurance coverage you need and provide you with a flood insurance quote.  

Call us about additional details on flood insurance coverage.
flood insurance new orleans la

Flood Insurance Quotes

Obtaining a Flood Insurance quote can be a very easy process if all of the required documentation is in place.  In many instances, your Alpha Insurance agent can provide your quote over the phone in just a matter of minutes.

New Orleans Flood Insurance

Flood Insurance Claims

There are very specific requirements set up by the National Flood Insurance Program, a federal program created to provide access to affordable, federally-backed flood insurance protection for property owners.