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Even though more than 5 million policyholders in America have flood insurance through the NFIP, that’s still a fraction of those who actually need coverage. For any given region, or individual homeowner, the need for flood insurance is widely underestimated. For example, 80 percent of residents living in areas hit by Superstorm Sandy in 2012 had no flood insurance. So, flood insurance is a good idea for many, many people.
Here, are five common questions about flood insurance — what it covers, what it excludes and when you should consider buying it.
Do I need flood insurance?
It depends. If you’re purchasing a house with a federally-backed mortgage in an area at high risk of a flood, flood insurance is actually mandatory. If you inherited your home or have paid off your mortgage, the decision to buy flood insurance is up to you. Remember, a flood insurance policy is better than no flood insurance policy.
What does flood insurance protect my house from?
Flood insurance is meant to protect your house from rising waters, from “inundation” (when water covers normally dry land) and from mudflows (when floodwater mixes with mud), but not landslides (which have actual pieces of moving earth and debris). As a homeowner you can insure your house for up to $250,000 and the contents of your house for up to $100,000. For businesses, the upper limits are $500,000 for each. The insurance is meant to cover cleanup, debris and mold removal, and repairs to the structure of the house.
What doesn’t flood insurance protect my house from?
Flood insurance doesn’t cover damage that exceeds $250,000. It also doesn’t cover certain parts of your house — any furnished area that’s below ground level, walkways, trees, pools and decks. And it only covers a limited number of essentials in the basement (even if it’s finished), like a furnace or hot water heater.
If you buy flood insurance for your belongings, coverage for certain items like artwork, antiques and jewelry is limited.
What exclusions should I look for?
Some exclusions in flood insurance that policyholders should be aware of are the “earth movement” clause, sometimes phrased as “long-term differential movement.” Flood insurance won’t cover the loss of property caused by “earth movement,” even if it’s caused by a flood — so that excludes landslides, sinkholes, movement of land due to water accumulation or gradual erosion.
Flood insurance also doesn’t offer temporary living expenses like home insurance generally does.
It’s best for homeowners to educate themselves on what is excluded by their policy so they can effectively advocate for themselves, or look for other sources of financing for repair
What should I do before a storm?
A few actions homeowners can take to protect their property before a flood hits include buying and using sandbags when a storm is imminent. People can also flood-proof their property, moving furniture and expensive contents above ground level, and installing flood vents.
A more costly but effective measure is elevating an entire room or structure, a practice commonly used along rivers and beachfronts.
As far as making sure you’re getting the most out of your flood insurance, industry professionals suggest keeping thorough documentation of everything: taking pictures of the house, the foundation, the interior and exterior walls and the condition of everything inside is really important to making your claim.
If a dispute arises over whether damage was pre-existing or not, you will have an easier time proving that it wasn’t if you have thorough documentation including photos. This is one of the areas where people’s flood claims go bad. Even after a flood, it’s important to take pictures of the damage before anything is done to clean it or move debris. This will put you in the strongest possible position to document what the flood did to your house.
We can’t stress the importance of finding an insurance agent who’s experienced in dealing with flood insurance, even if they are not local. The NFIP’s website has a tool that allows people to search for flood insurance agents by zip code at FloodSmart.Gov.