The Federal Emergency Management Agency (FEMA) observes flooding as a common phenomenon in all the regions of the United States. In fact, flooding, in all its forms, is responsible for about 85 percent of all the natural disasters. What’s even more alarming is the vulnerability of the houses in the low to moderate risk flood zones. Be it inland or non-coastal flooding, flash floods, or storm/cyclone led flooding; floods are the worst form of disaster that hits people when they are least prepared.
In the current era, extreme weather conditions are slowly becoming the new norm, and the best way you can tackle the challenge head-on is by insuring yourself and your property with an insurance policy. While nothing can avert the damage caused by a natural disaster like flood, a flood insurance policy can minimize the financial loss of the policyholder.
This blog acts as a ready reckoner of the things you should do to secure your family and your belongings with a flood insurance policy.
The Basics and The Reasons
Flood insurance is slightly different from other insurance policies. Let’s go through the basics of a flood insurance policy and understand the reasons for buying it.
1) The Federal Emergency Management Agency, under the United States Department of Homeland Security, is the nodal agency for responding to and mitigating disasters in the United States. FEMA also underwrites government-approved flood policies, and, through the National Flood Insurance Program, these policies are then sold by insurance companies, also known as the Write Your Own (WYO) Companies.
2) The typical homeowners’, renters’, and earthquake insurance policies do not provide insurance cover for damages incurred during a flood. Surprisingly, the result of a survey conducted by the National Association of Insurance Commissioners (NAIC) shows that around 35 percent of U.S. residents still believe that flood cover is a component of homeowners’ insurance.
3) Flood is the least predictable of all the natural disasters.
4) If a 2500 sq. Ft. one-story house gets flooded, and the interior water depth is just 1 inch, the cost for repair may be around $26,000. Visit FEMA to know more about the cost of flooding.
5) If you live or are planning to live in a mortgaged property in a high-risk flood zone, buying a flood insurance policy is mandatory. However, since low to moderate flood risk zones are almost equally vulnerable, your lender may as well ask you to buy a flood insurance policy should you plan to buy/rent accommodation in that zone. A survey conducted by FEMA found that 50 percent of people living in low-risk zones think they are not eligible for buying a flood insurance policy.
6) If you do not pay the premium within 90 days of the last premium payment date, the flood insurance policy may lapse, and to revive it, you may have to provide an Elevation Certificate. Plus, you stand the risk of losing policy discounts and other benefits accumulated to date.
7) Just in case you have already received a grant from FEMA or SBA as part of the Federal Disaster assistance, you need to have a valid flood insurance policy for claiming grants in the future.
8) According to FEMA, residents of CA, WA, OR, CO, ID, UT, NV, MT, AZ, and the Western U.S have exposed to the ill-effects of wildfire led flooding and mudflows. To avoid financial burden in case of sudden flooding, you should actively consider buying flood insurance policy if you live in these states.
The Eligibility Criteria
Anyone who is part of a community registered with the National Flood Insurance Program (NFIP) can buy a flood insurance policy. Approximately 22,000 communities are registered with NFIP. You may find the latest community list here. If you are planning to buy/rent a property in an area classified as Special Flood Hazard Area, then buying flood insurance is mandatory under federal laws.
How Can I Buy a Flood Insurance Policy?NFIP or FEMA does not directly sell flood insurance policies. You may only buy it through an NFIP impaneled insurer like Rais Insurance. Rais Insurance is one of the best flood insurance companies which specializes in providing Renters’ Insurance, along with a host of other insurance services in California. It is a family-owned and operated insurance company with over 40 years’ experience in the business. Trained and certified professionals take care of the requirements of customers and provide customized solutions. Its rich legacy allows it to offer the most competitive rates and the most personalized service to its customers.