Floods are involved in up to 90 percent of all-natural disasters. So, it is no surprise that flooding is one of the most common damage claims filed by property owners. Home and condo owners insurance, business owners insurance and commercial property insurance policies do NOT cover flooding.
Flood insurance is often a requirement
When you buy a home and take out a mortgage, your lender might require you to purchase flood insurance, depending on where you live. Your lender will certainly require flood insurance if you live an area prone to floods. How much insurance your lender requires you to take out depends on the value of your home. If your home is valued at more than that $250,000 limit, your lender will usually require you to purchase excess flood insurance in addition to an NFIP policy-National Flood Insurance Program (NFIP). This program is part of the Federal Emergency Management Administration (FEMA) and began in 1968. This might seem like a burden, but excess flood insurance does come with extra protections that could be financially helpful if your home is damaged or destroyed in a flood.
Excess Flood Insurance Coverage
Here is the coverage you will receive when adding extra insurance to your flood policy:
• Increased Claim Limits. Your NFIP flood policy maxes out at $250,000 for your house and $100,000 for your personal items. An excess flood insurance policy increases that limit to whatever amount you need.
• Additional Living Expenses. If your home floods, chances are you will have to stay elsewhere until you repair the damage. Standard flood insurance does not pay for ALE, but excess policies do. Keep in mind that an HO3 standard homeowners insurance plan does offer ALE, but not in flooding cases.
• Second Residence. If you own a vacation home, you want to protect it just as much as your primary residence. The NFIP charges a fee to insure multiple properties, but you can avoid this penalty if you buy excess flood insurance through a private insurer.
If you own a condo and own your kitchen cabinets, appliances, and other things like plumbing, your mortgage bank will likely require you to have a contents policy covering those items. The NFIP’s contents coverage maxes out at $100,000. If the structural things you own will cost more than $100,000 to buy and install, your lender will require excess flood coverage.
Aloha Insurance Services can provide you with the necessary flood protection needed through both the NFIP program and Excess Flood insurance programs to meet your needs.
Home and condo owners insurance, business owners insurance and commercial property insurance do NOT cover flooding. Flood insurance is available to home and condo owners, business owners and renters. Home and condo owners, business owners and renters may purchase flood insurance for both a building and its contents.
Historically, flooding has brought damage and destruction to communities across the United States. In order to help alleviate the financial devastation caused by flooding, Congress created the National Flood Insurance Program (NFIP) in 1968. The NFIP, managed by the Federal Emergency Management Agency (FEMA), enables homeowners, business owners and renters in participating communities to purchase federally backed flood insurance.
Contact us to get a quote or more information.