Flood Insurance

There’s something you should know: Flood losses are not covered by your homeowners insurance policy.

Floodwaters have the power to damage not only your home and sense of security but also your financial future. How can you protect your most important investment in case of flooding?

Option 1: Hope That You’ll Receive Federal Disaster Relief If a Flood Hits

Many people wrongly believe that the U.S. government will take care of all their financial needs if they suffer damage due to flooding. The truth is that federal disaster assistance is available only if the president formally declares a disaster. Even if you do get disaster assistance, it’s often a loan you must repay, with interest, in addition to your mortgage loan that you still owe on the damaged property.

Most importantly, you must consider the fact that if your home is flooded and disaster assistance isn’t offered, you’ll have to shoulder the massive damage costs alone. The bottom line is that if you’re looking for secure protection from financial loss due to flood damage, federal disaster assistance is not the answer.

Option 2: Buy Flood Insurance and Stay Protected No Matter What

When disaster strikes, flood insurance policyholder claims are paid even if a disaster is not federally declared. Flood insurance means you’ll be reimbursed for all your covered losses. And unlike federal aid, it never has to be repaid.

In general, a policy does not take effect until 30 days after you purchase flood insurance. So if the weather forecast announces a flood alert for your area and you go to purchase coverage, it’s already too late. You will not be insured if you buy a policy a few days before a flood.

Common Questions Asked About Flood Insurance:

Why Is Flood Insurance Important?

Flooding is a serious risk for many properties. Even if a home has never experienced a flood while you’ve lived there, it could be susceptible in the future. Amid climate change, shifting flood maps and unexpected rainfall could introduce more flood risks for more homes.
Critically, flood insurance is important because flood damage is often excluded from home insurance policies. While some water damage from internal sources (e.g., burst pipe) may be covered by homeowners insurance, water-related events from external sources typically are not. This means that if a basement floods due to heavy rain, a standard home policy likely wouldn’t cover the damage.

Having a separate flood insurance policy may help cover these often unexpected and costly situations.

How Does Flood Insurance Work?

Flood insurance works like most other forms of coverage: You purchase a policy in advance, and then if a covered event occurs, you file a claim with the insurance company. After reviewing and verifying that the event was covered, the insurer will provide compensation in accordance with the policy terms.

Commonly, flood insurance is underwritten by the National Flood Insurance Program (NFIP); however, while less common, private flood insurance may be available. Contact your insurance agent to start the coverage process and learn more about available options.

Again, flood insurance typically doesn’t take effect until 30 days after it’s purchased. So don’t delay securing a policy.

What Does Flood Insurance Cover?

While private flood insurance may vary in terms of coverage, NFIP policies are typically standard. They generally include the following:

• Building coverage, which may pay for damages to the physical structure of the home
• Contents coverage, which may pay for damages to the possessions within the home

Speak with your insurance agent to learn more about flood policy specifics and coverage available to you.

Who Needs Flood Insurance?

As stated earlier, many homes are vulnerable to flooding. Whether a flood policy is needed may come down to various factors, such as your ability to pay for losses out of pocket, your risk appetite and your home’s location.

However, coverage may be nonnegotiable in some cases. Lenders may require flood insurance if the home is in a high-risk flood zone; some lenders may even require it even if the area isn’t high risk.

There may be other circumstances that necessitate coverage as well. Your agent can help assess your situation and recommend coverage solutions.

Is Flood Insurance a Good Idea?

If you live in a flood-prone area, like much of Florida, it’s advisable to have flood insurance. It’s crucial to have coverage before a crisis occurs. Once your property floods, it’s too late to obtain a flood insurance policy. If you’re considering coverage, reach out to an agent for further discussion.

How Do I Get Flood Insurance in Florida?

To purchase flood insurance, call your agent to get started. Be sure to plan at least 30 days ahead as there’s a waiting period for an NFIP policy to go into effect. Waiting periods can be bypassed depending on your lender, so be sure to discuss with an agent what your plan for coverage is.

Talk to one of our agents to determine which flood insurance options are best for you. We recommend that you have your plan in place from the moment you close on a home purchase. We’re committed to working with you to ensure you receive the right benefits at the right time.

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