Flood Insurance. What is it? Do you have it? Do you need it?

What is a flood?​

​The National Flood Insurance Program (NFIP) defines flood to be a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties from:

• Overflow of inland or tidal waters;
• Rare and quick buildup or runoff of surface waters from any source;
• Mudflow; or
• Collapse of land along the shore of a lake or similar body of water because of erosion.

​The Federal Emergency Management Agency (FEMA)

In 1968, the National Flood Insurance Act established the National Flood Insurance Program (NFIP), which allows property owners to purchase insurance from the U.S. government that covers certain losses from flooding. Subsequently, on April 1, 1979, President Jimmy Carter signed the executive order that created the Federal Emergency Management Agency (FEMA). From the beginning, FEMA has remained committed to protecting and serving the American people. For thirty-nine years, FEMA's mission remains: to lead America to prepare for, prevent, respond to and recover from disasters with a vision of "A Nation Prepared."
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While Most homeowners are not required by any law to carry Flood Insurance, the Flood Disaster Act of 1973 made it mandatory for homes in certain flood zones to purchase this coverage. Therefore, today if you purchase a home in a flood zone “A” or “V” most financial lending institutions will force you to purchase flood insurance if you are borrowing money. However, if you buy the home outright with no debt or a private loan from the old owners, you will most likely not be forced to purchase this coverage. 

However, while you may not be required to purchase this coverage, you should still consider it. One of FEMA’s goals is to make Flood Insurance Affordable. Pricing should not vary company to company. The pricing guidelines are overseen by FEMA to make sure the homeowner is getting a fair price for the protection needed. On March 21, 2014, President Obama signed the Homeowner Flood Insurance Affordability Act of 2014 into law.

​Key Priorities include:

• Refunds, Rates, and Surcharges
• Mapping
• Promote Mitigation and Flood Insurance Advocacy. 
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Flood Insurance​

Do you know what the most common natural disaster in America is? A Flood. However, what most homeowners don’t realize is that their home insurance policy does not cover damage caused by a flood.  They need to purchase a separate policy just for the risk and loss of Flooding. Flood Insurance policies are issued through the National Flood Insurance Program (NFIP) and available to homeowners, renters and businesses. If you don’t have flood coverage and live in a coastal community, considered calling your insurance agent to quote one today. You need to be aware that there is a standard 30 day waiting period to purchase flood insurance on a property you own already. However, if the property is a new purchase only NFIP will make an exception for the closing and make the insurance effective the date of the closing.  Once the closing date passes you will have to wait the 30-day period again, so think carefully about having the coverage in effect for the closing. Especially if you are closing on the property during Hurricane Season which typically is around July through October. It is also important to note that you will not be able to start a flood insurance policy during a hurricane, closing or not. You will have to delay your closing on your home. In some cases, you may be able to transfer the old property owners flood policy to you.  

Who would need flood insurance, you ask, and how much would it cost? Let’s review:  

The Homeowner

As a Homeowners, you can purchase flood insurance covering up to $250,000 of flood damage to your home. A standard flood policy will cover structural damage, including damage to the furnace, water heater, air conditioner, floor surfaces (carpeting and tile) and debris clean-up. The contents of your home are not covered under a standard flood policy, but for an additional premium, you can purchase flood coverage for up to $100,000 of damage to your personal property.  

The Renter

Flood is not covered under your basic renter’s insurance policy. Since you don’t own the building, you would only be concerned with your personal property within the apartment. Talk to your insurance agent and decide if your risk is great enough to warrant flood coverage as a tenant. 

The Business Owner

A standard business owner’s policy (BOP) does not cover flooding. However, a flood insurance policy can be purchased to cover up to $500,000 on a commercial building and its contents.  

How Much Will Flood Insurance Cost?

The average homeowners flood insurance premium is approximately $700 a year, based on a study done by FEMA. However, in NYS premiums can be much higher than the national average. Premiums for flood insurance will vary depending on your risk level for a flood loss, the amount of coverage you choose, the type of coverage you need and your deductible. You should consider raising your deductible to lower your premium. In some parts of the Bronx, if you are in a flood zone “X” your premium can be as low as $460.  Contact your insurance agent to find out what flood zone your home is in.

Where Do I Buy Flood Insurance?

You can purchase flood insurance for your home or business regardless of whether the property is in a floodplain. Every property is in a flood zone, the question is which zone is your property in? Contact your insurance agent or company to find out if your community participates in the NFIP. You can also visit www.floodsmart.gov to learn more about flood insurance.

What to do If your property is damaged by a flood.

If you don’t have flood insurance, you will not have coverage on your homeowner’s policy, but you are welcome to call your insurance company and make sure. If you were lucky enough and did purchase a flood insurance policy, the first thing to do is call the claim department of your insurance company and file a claim. The insurance company will send an adjuster out to review the damages and assess whether they are covered by the policy, however please know that you also have the right to have a public adjuster represent you to make sure the payout is fair. The public adjuster will be compensated from the claim paid by the insurance company. If a federal disaster is declared for a flood in your area, you can also apply to FEMA for disaster assistance, whether you have insurance or not.

As with any home insurance, whether flood insurance or regular home insurance, it is always a good practice to make an inventory of all your personal property. To provide proof to your company for your items lost, it is also great to take photos and video of your home and narrate what you are videoing and zoom in on serial or model numbers. Receipts of the items recently purchased will also make filing a claim faster and easier. If you would like to pick up a blank home inventory sheet, please feel free to stop by my office anytime for a free consultation. Once you have completed this inventory list, you should make sure the list, photos and/or video remain in a safe, dry place away from any potential damages. You may even consider getting a fire proof safe. In our area of the Bronx, you can purchase one at Galaxy Locksmith on East Tremont. If the event of a loss, whether fire or flood, your documents will be no good to you if they are damaged.

I hope this article has answered some of your questions about Flood Insurance. Specific questions you may have can always be addressed in person at our office located at 3600 East Tremont Ave in the Throggs Neck Section of the Bronx. We welcome you to call or stop by for a free consultation. Our number is 718-829-3200. Flood Insurance, Home Insurance, Auto Insurance, Business Insurance and Life Insurance can be very complex. There is nothing better than a face to face meeting with your insurance agent. We would love to be the company you come to for all your insurance needs. With the summer coming, please get ready for upcoming hazards, such as hurricanes, vacationing while your home is vacant. Let your neighbors know who your insurance agent is so that in the event you are not home and a claim takes place, your insurance agent can get your home protected from more damage until you get home. Have a Great Summer!

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