In the past few years alone there has been a growing number of severe weather-related events. Between hurricanes and snow storms on the East coast, tornadoes in the Midwest and droughts, and fire damage on the West coast, no part of the country is excluded. What makes these storms so damaging is their unpredictable nature. In many cases you only have a few days notice, if at all. Even if you had weeks to prepare, a super storm could tear right through all your planning. While you can never totally prevent a storm from happening, the best thing you can do is prepare for it with insurance.
Having the right insurance won’t stop the storm from coming, but it does minimize the financial impact. Many homeowners have heard of flood insurance but don’t know exactly what it does and what it covers. When a big storm is bearing down on you, it is too late to get insured. Here are four things you should know about flood insurance.
Separate Policy:If you are like most homeowners, you probably don’t know exactly what your policy covers. It is easy to assume that you are protected from wind, rain, and flooding but this is often not the case. Water damage is a separate item that is not covered by traditional homeowner’s insurance. Only in rare instances when a pipe bursts or a toilet explodes are you covered. Any other type of water damage requires specific flood insurance. This policy not only protects you from excessive rain and flooding, but also insures your home from a storm surge. Like any other policy it is important to know and understand what is covered and what you are liable for. A separate homeowner’s policy will not cover any type of water damage caused by a storm.
Price: The average annual flood insurance policy costs between $800-$1200 per year. The closer you are to water the higher your policy will be. If you are within a mile from water, it is not uncommon for the policy to be double the average amount. This is part of living on, or near the water. You can live in the house for years and not deal with as much as a flooded basement, but all it takes is one storm to ruin the property. Flood insurance may be expensive, but you will be glad you have it when a big storm hits.
Coverage: Every flood insurance policy is different, but most policies cover the physical damage to the property or cash value of the damages typically up to $250,000. This includes any damage to the structure as well as mechanical items such as the furnace, water heater, and certain appliances. It is important to know that flood insurance does not cover all water damage to the property. Even if you are insured, it may not cover flooding to the basement or crawl space. Additionally, it may not cover all the appliances in the property. Certain policies require an additional premium for personal property. Flood insurance is very specific, so it is critical that you talk to your insurance provider to understand exactly what you are getting.
Waiting Period:When a storm is imminent it is too late to call your insurance company. There is a waiting period of at least 30 days prior to the coverage start date. The insurance companies do not let you insure your property only when a big storm is on the way. As we have seen from the recent rash of big storms all it takes is one to wipe everything out. If you are anywhere near the water or in an area that has a high likelihood of heavy flooding, you need to consider getting insured before a storm hits.
Flood insurance can be pricey and there will be times when you wonder if it is necessary, but it is an essential part of protecting your home. It is always better to have insurance that you never use then wonder why you didn’t have it after a big storm hits. If you live near the water, you should call your local insurance provider today.