Betcha Didnít Know These Flood Insurance Facts!
Published Monday, March 19, 2018
Here are some of the major points to understand as you consider buying flood insurance.
Excluded Property. Even with flood insurance, these items are excluded from coverage.
- No coverage for the cost for you to live somewhere else while your home is uninhabitable (known as additional living expense coverage).
- Basement coverage is severely limited. Any finished floors/carpet or personal contents other than food freezers, washers, dryers, or portable/window air conditioners are NOT covered. This means those home theaters with wet bars and leather sofas are not insured against flood.
- Hot tubs, decks, pools, fences, patios, and the like, are excluded.
Limited Coverage. Read these limitations carefully.
- Damaged contents are settled for their Actual Cash Value (ACV). Replacement cost is not available. This means that your 7-year-old couch is depreciated and you do not receive the value to replace that couch at today’s cost.
- Residential buildings can qualify for replacement cost coverage IF the flood limit is 80% or greater of its replacement cost. This only applies to primary residences (the insured must live there for more than 50% of the year).
- Building coverage claims are paid out actual cash value for non-primary residences and commercial properties. There is no guaranteed replacement cost.
- A detached garage can be written separately with its own limit OR 10% of the building coverage on the home flood policy can be applied towards the detached garage.
- Debris removal is covered, but its limit comes from the building limit. If the insured removes debris himself, FEMA will pay him based on minimum wage.
- There is a $250 surcharge for non-primary residence policies. Primary residency must be verified and once it is, the surcharge is only $50.
- Policies include up to $30,000 for Increased Cost of Compliance. This is coverage for policyholders who need additional help rebuilding after a flood. It covers mitigation measures that will reduce flood risk for policyholders who have experienced substantial damage or meet the criteria of a repetitive loss structure. This is an additional limit and is paid by a fee included in the total premium. It is a mandatory coverage for all policies except contents only policies, condo unit policies and properties in the emergency program.
- Higher maximum building and personal property limits are pending in Congress. If passed, the new building limit would be $335,000 (from $250,000). Some Write-Your-Own carriers offer excess building coverage that goes beyond NFIP’s limits.
- The deductible applies separately to each coverage, not per claim. So if building and personal property limits pay out, the insured must pay two deductibles.
- Private Flood options are increasing, and in some cases can offer substantial savings. Talk to us if you’re interested in exploring these options.
We are here to talk you through the benefits, limitations, and exclusions of flood insurance. The more educated you are, the better prepared you’ll be in the event of a claim.
Click here to contact us or call us at 419-241-5133 to talk more!