If you live anywhere the New York area, you know that March has been the wettest month on record. Yesterday I looked out into my backyard, which had ducks swimming in my lake…which I didn’t have before yesterday! Mature trees have fallen over from the waterlogged soil, streets flooded, vast erosion of private and public land, and an overall feeling of I’ve just had enough. Homeowners in flat, safe areas that never gave water damage a thought are dealing with inches or feet of water in their lower levels and garages. Thank goodness you have homeowners insurance…but are water damages covered? Do you have flood insurance?
In insurance jargon, flooding is defined as “A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from: overflow of inland or tidal waters; or the unusual and rapid accumulation or runoff of surface waters from any source; mudflow; or the collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.” Got that?
The National Flood Insurance Program
Because of the catastrophic nature of property losses suffered in floods, flood insurance was, for many years, generally unavailable. In response to this need, the federal government, in 1968, established the National Flood Insurance Program (NFIP). Under this program, managed by the Federal Emergency Management Agency (FEMA), the federal government stands as an insurer of last resort for flood insurance. In exchange for this guarantee, the government requires participating communities to adopt and enforce land use measures that direct future development away from flood prone areas. The availability of flood insurance under the NFIP is conditioned on a community agreeing to follow federal flood planning requirements. The amount of insurance available and the type of structures covered, will vary depending on how far along a community is in meeting all federal conditions.
Emergency program: Basic coverage under the emergency program (EP) is available when a community agrees to adopt federal standards. For example, coverage under the EP for a single-family residence would be limited to $50,000 on the dwelling and $15,000 on personal property.
Regular program: When a community has completed certain federal requirements, it enters the regular program (RP). Under the RP, additional coverage becomes available. For example, coverage under the RP for a single-family residence can be as much as $250,000 on the dwelling and $100,000 for personal property. Excess flood insurance for higher limits outside the program is available.
Flood insurance may be purchased from your insurance agent who carries your basic homeowner’s policy or depending on your location directly from the Federal Government. Policies have basic coverage and limitation gaps which may be filled by adding riders or additional insurance to the basic policy. Basic questions to ask when securing this type of insurance are:
- What hazards are covered
- What hazards are not covered
- Limits of coverage
- Deductibles
- Limits of coverage
- Steps that must be taken in the case of a loss- how to submit a claim
- Coverage to dwelling and appurtenances
As in the case of all legal contracts, be sure to consult with a qualified, licensed insurance agent who is licensed in your state and is familiar with the area in which you live. These professional will assist you in selecting the right policy and coverage for your need.
