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Learn About Residential Flood Policies

Homeowners and renters are eligible for flood insurance. Find out more information about why flood insurance is a necessity, what it covers, how to protect your family before, during, and after a flood, and other important information about flood insurance. Also, learn what your current risk of flooding is.

Flood damage is excluded from the majority of homeowners policies which leaves your home and personal property uninsured in the event of a flood. You need flood insurance so that, in the event of a flood, you will have money to repair or rebuild your home and replace your personal property.

Floods are one of the most common hazards in the United States. Flood effects can be local, impacting a neighborhood or community, or very large, affecting entire river basins and multiple states.

Be aware of flood hazards no matter where you live, but especially if you live in a low-lying area, near water or downstream from a dam. Even very small streams, gullies, creeks, culverts, dry streambeds, or low-lying ground that appears harmless in dry weather can flood. Every state is at risk from this hazard.

To protect against the risk of flooding, homeowners and renters can purchase a flood insurance policy with dwelling limits up to $250,000.00 and personal property limits up to $100,000.00 through the National Flood Insurance Program. Since this insurance is subsidized by the Federal government, it is extremely affordable.

How do I protect my Assets?

Protect Yourself with Flood Insurance
Just a few inches of water from a flood can cause tens of thousands of dollars in damage. Over the past 10 years, the average flood claim has amounted to over $33,000. Flood insurance is the best way to be protected from devastating financial loss resulting from floods.

Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters. Costs vary depending on how much insurance is purchased, what it covers, and the property's flood risk.

All policy forms provide coverage for buildings and contents. However, you might want to discuss insuring personal property with your agent, since contents coverage is optional. Typically, there's a 30-day waiting period—from date of purchase—before your policy goes into effect. That means now is the best time to buy flood insurance.

In addition to protecting your assets with being properly insured it is also beneficial to be knowledgeable on Flooding. Flooding is the most common hazard in the United States.

Understanding Flood Insurance

Coverage
As with any other type of insurance, it's important to know what your policy does and doesn't cover. For example, 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.

Deductible
Deductibles apply separately to building and contents with different amounts to choose from. Like other insurance plans, a higher deductible will lower the premium you pay, but will also reduce your claim payment. Your mortgage lender can also set a maximum amount for your deductible.

Mandatory Requirements
Homes and businesses with mortgages from federally regulated or insured lenders in high-risk flood areas are required to have flood insurance. While flood insurance is not federally required if you live in a moderate-to-low risk flood area, it is still available and strongly recommended.

Rates
The NFIP, a federal program, offers flood insurance, which can be purchased through Direct Flood Insurance Agency L.L.C. Rates are set and do not differ from company to company or agent to agent. These rates depend on several factors including the date and type of construction of your home, along with your area's level of risk. All premiums include a Federal Policy Fee and ICC Premium.

Rates effective May 1, 2010
Below, you'll find a sampling of policy premiums for different amounts of coverage.

Moderate-to-Low Risk Areas
RESIDENTIAL: Preferred Risk Policy (ZONES B, C, X)

(PRE-/POST-FIRM)
A residential policy, based on preferred rates for qualified structures in moderate-to-low risk areas. A Preferred Risk Policy offers two types of coverage: Building & Contents and Contents Only.

 

Building & Contents Contents Only1, 4
Coverage Annual Premium2, 3 Coverage Annual Premium2
  Without Basement Enclosure With Basement Enclosure   Contents Above Ground (more than 1 floor) All Other Locations (basement only not eligible)
$20,000 / $8,000 $119 $144 $8,000 $39 $58
$30,000 / $12,000 $150 $175 $12,000 $55 $82
$50,000 / $20,000 $201 $226 $20,000 $86 $118
$75,000 / $30,000 $237 $267 $30,000 $100 $137
$100,000 / $40,000 $264 $294 $40,000 $112 $154
$125,000 / $50,000 $284 $314 $50,000 $124 $171
$150,000 / $60,000 $303 $333 $60,000 $136 $188
$200,000 / $80,000 $333 $368 $80,000 $160 $208
$250,000 / $100,000 $355 $395 $100,000 $184 $228
1 Add the $50.00 Probation Surcharge, if applicable.
2 Premium includes Federal Policy Fee of $20.00.
3 Premium includes ICC premium fee of $6.00. Deduct this amount if the risk is a condominium unit.
4 Contents-only policies are not available for contents located in basement only.

Note: Residential condominium associations are not eligible for the Preferred Risk Policy. Individual residential condominium units in residential condominium buildings are eligible for the Preferred Risk Policy. In addition, individual residential condominium unit owners in nonresidential condominium buildings are only eligible for contents coverage. The deductibles apply separately to building and contents. Building deductible, $1,000. Contents deductible, $1,000.

To qualify for replacement cost claim settlement, a single-family dwelling must be the insured ‘s primary residence and be insured to the maximum amount of insurance available under the program or no less than 80% of the replacement cost at the time of loss. Please refer to the policy or manual for further explanation and requirements.

30-Day Waiting Period
There is typically a 30-day waiting period—from date of purchase—before a new flood policy goes into effect. Here are the only exceptions:

  • If your lender requires flood insurance in connection with the making, increasing, extending, or renewing of your loan.
  • If an additional amount of insurance is required as a result of a map revision.
  • If flood insurance is required as a result of a lender determining that a loan that does not have flood insurance coverage should be protected by flood insurance.
  • If an additional amount of insurance is being obtained in connection with the renewal of a policy.

Payment
Payment must be made for the full year's premium. The Direct Flood Insurance Agency, L.L.C. accepts check and credit card payments (i.e. American Express, VISA, MasterCard). Coverage will not be effective until full payment is received.

What's Covered
Flood insurance policies cover physical damage to your property and possessions. You can use the following list as a general guide to what is and isn't covered or simply refer to the Summary of Coverage to help you better understand your policy and coverage.

Building Property

  • The insured building and its foundation
  • Electrical and plumbing systems
  • Central air conditioning equipment, furnaces, and water heaters
  • Refrigerators, cooking stoves, and built-in appliances such as dishwashers
  • Permanently installed carpeting over unfinished flooring
  • Permanently installed paneling, wallboard, bookcases, and cabinets
  • Window blinds
  • Detached garages (up to 10 percent of Building Property coverage) Detached buildings (other than garages) require a separate Building Property policy
  • Debris removal

Personal Contents Property

  • Personal belongings, such as clothing, furniture, and electronic equipment
  • Curtains
  • Portable and window air conditioners
  • Portable microwave ovens and portable dishwashers
  • Carpets that are not included in building coverage
  • Clothing washers and dryers
  • Food freezers and the food in them
  • Certain valuable items such as original artwork and furs (up to $2,500)

What's Not Covered

  • Damage caused by moisture, mildew, or mold that could have been avoided by the property owner
  • 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
  • Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy)

Flood Insurance for Basements and Areas Below the Lowest Elevated Floor
Coverage is limited in basements regardless of zone or date of construction. It's also limited in areas below the lowest elevated floor, depending on the flood zone and date of construction. These areas include:

  • Basements
  • Crawlspaces under an elevated building
  • Enclosed areas beneath buildings elevated on full-story foundation walls that are sometimes referred to as "walkout basements"
  • Enclosed areas under other types of elevated buildings

If you have a basement, make sure to ask Us for additional details on your basement coverage.

ELEVATION CERTIFICATE

You may be asked for or required to obtain an Elevation Certificate. This certificate verifies the elevation of the lowest floor of your house relative to the ground. It is especially important if your house/building is in a high-risk flood area.

An Elevation Certificate is only required if your building was built, or substantially improved, on or after the date of the community's initial Flood Insurance Rate Map (FIRM). These buildings are considered to be Post-FIRM. Be sure to ask Us if your house/building is a Pre-FIRM or Post-FIRM building before purchasing your Elevation Certificate.

Even if an Elevation Certificate is not required for your home it may be beneficial in lowering your premium. Communities, who participate in the Community Rating System (CRS), have a standard elevation for the entire community. In this case the elevation for your home is determined by this Community Elevation Certificate; however, your home may be above the elevation for the area and therefore, lowering your premium. Please, ask us for our expert opinion if an Elevation Certificate will benefit you.

 
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