You may think that your homeowners insurance covers you from all potential calamities ranging from theft to fire to floods. If Meatloaf is your thing, well, two out of three isn’t bad. However, if you’re looking for a perfect score when it comes to protecting your home, then we’re here to tell you that standard homeowners, condo, and renters insurance do not cover flood damage. Generally speaking, water damage caused by flooding, regardless of the source, will be not be covered.
Of course, if your home falls in a high-risk flood area and you are still paying off your mortgage from a federally-regulated lender, then you’re required to carry flood insurance. If flood insurance isn’t mandated, however, you may be wondering if you really need flood insurance. If watching the torrential and relentless spring rains saturate the Tennessee clay has you and your family on edge, then it may be time to invest in flood insurance.
Floods can happen anywhere, anytime. According to the Federal Emergency Management Agency (FEMA), floods are the nation’s most common and costly disasters. Yet the Insurance Information Institute discovered that in 2016, just 12% of Americans carried flood insurance.
Working with a qualified agent, you can purchase a separate flood insurance policy from the National Flood Insurance Program (NFIP). The NFIP is regulated by FEMA. It’s important to note that you cannot buy a policy directly from the NFIP. Created in 1968 to address the rising costs of taxpayer-funded disaster relief for flood victims, the NFIP helps protect taxpayers, communities, and individual homeowners. With storms increasing in intensity and floodplains growing, federally-backed flood insurance is more important than ever before.
Fast Facts About Flood Insurance from FEMA:
- Floods can happen anywhere–More than 20 percent of flood claims come from properties outside the high-risk flood zone.
- Flood insurance can pay regardless of whether or not there is a Presidential Disaster Declaration.
- Most federal disaster assistance comes in the form of low-interest disaster loans from U.S. Small Business Administration (SBA) and you have to pay them back. FEMA offers disaster grants that don’t need to be paid back, but this amount is often much less than what is needed to recover. A claim against your flood insurance policy could and often does, provide more funds for recovery than those you could qualify for from FEMA or the SBA–and you don’t have to pay it back.
- Renters and homeowners are eligible to purchase a flood policy.
- Don’t wait until storm and flood season! Typically there is a 30-day waiting period before your policy goes into effect.
How Much Does Flood Insurance Cover?
The Insurance Information Institute notes that the “NFIP provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. The NFIP policy provides replacement cost coverage for the structure of your home, but only actual cash value coverage for your possessions.” In a nutshell, flood insurance will pay up to $250,000 towards the cost of rebuilding your home as it was before the damage. Actual cash value means that it covers your belongings, less depreciation. So the older your stuff, the less you’ll see from your policy. There may also be limitations for items stored in your basement.
These limits may be worth bearing in mind before investing in an high-value property located in a designated flood zone. Concerned homeowners can view Nashville’s FEMA-approved floodplain/floodway map online.
What Does Flood Insurance Include?
When you work with a local insurance agent, you’ll enjoy 24/7 nationwide claims support and assistance, dedicated professionals who are committed to helping you get the most from your coverage in the event of a claim, and help with finding possible discounts.
NFIP covers your home and its foundations; electrical and plumbing systems; HVAC components; appliances; carpeting; permanently installed wallboard, paneling, bookcases, and cabinets; window coverings; detached garaged (up to 10% of your home value); debris removal; and more.
What Isn’t Covered?
Your home’s foundations, permanently installed components, and systems are generally covered; however, if it belongs in a vault, you’re probably out of luck. Examples of items that are excluded may include precious metals, stock certificates, cash, and excessive amounts of jewelry or art. You may be surprised to learn, however, that things like septic sysems, wells, landscaping, decks, and pools are not covered.
For a complementary homeowners and flood assessment, contact Royce Williams Insurance at 615.356.4800.