How to insure home and property from floods in the US

Hurricane Dorian approaching US territory made many Americans think about what would happen if they had to survive catastrophic floods and how to pay for the damage caused by the elements. Can I get flood insurance?

Фото: Depositphotos

Unfortunately, homeowners insurance will not be able to cover any losses associated with floods. According to Lynne McChristian, spokesman for the Insurance Information Institute, about half a century ago, this type of coverage excluded such damage. Tenant insurance also does not cover losses caused by floods, writes USA Today.

“This is an uninsurable risk,” she said, “floods cause so much damage to so many homes that it could wipe out an insurer.” Instead, the federal government serves as an insurer for millions of homes in the most at-risk areas.

What is flood insurance?

Flood insurance policies—separate from homeowners and renters insurance—are backed by the National Flood Insurance Program and are designed to replace your property and rebuild your home after a flood. NFIP policies cover up to $250 for your home and up to an additional $000 for your contents.

“The limits are not too high for some areas of the country,” says Tom Santos, vice president of federal affairs for the American Insurance Association. “Homeowners (in these areas) should therefore consider purchasing additional coverage from private insurers.”

Most mortgage lenders require flood insurance for homes located in high risk areas of flooding. Similarly, if your home is located in such a zone, and you previously received federal assistance in the event of natural disasters, you need to be insured against floods in order to be eligible for assistance in the future.

Фото: Depositphotos

How does it work?

There is a 30-day waiting period - only after its expiration will the insurance take effect. Therefore, you will not be able to quickly get insurance when a hurricane is already approaching your state. The policy should also be renewed annually. If you realize you need coverage, plan ahead. Most insurers sell NFIP policies, so check with your insurance agent or broker. You can also obtain a referral agent by contacting the NFIP Help Center at 1-800-427-4661.

The amount you'll pay depends on the characteristics of your deductible and your home, including objective flood risks. Although the average annual premium is between $600 and $700, it is effective for those living in low- to moderate-risk areas. “If you live on the coast, it could be thousands of dollars because the risk is greater,” the expert says.

To apply for flood damages, contact your homeowner service provider as soon as the weather conditions return to normal. The damage will be assessed and will determine which policy should cover one or another part of it. It is important to provide inventory and photos of the property, both before and after flooding. Ultimately, the NFIP will reduce the check to pay for flood losses.

What happens if you do not have insurance?

If a flood has caused damage to your home, but you do not have flood insurance, be prepared to pay for most of the losses yourself. The Federal Emergency Management Agency offers small disaster subsidies that average 5 000 dollars per household, which is much less than the average insurance indemnity of 30 000 US dollars.

The small business administration also provides low-interest loans to homeowners and tenants, which can be used to repair or replace homes and damaged property in areas designated as disaster zones. But ultimately they must be returned.

That is why it is important that homeowners and tenants assess their risk and provide adequate insurance coverage. Flood insurance is not only important for people in high-risk areas. Every fifth payment is made to people from low and medium risk areas.

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