As the weather begins warming up, and spring is in the air, we remember that Mother Nature can create some intense disasters that are very harmful to our homes. This week, we focus on flooding. Most homeowners’ insurance policies do not offer coverage for floods. In 1968, Congress created the National Flood Insurance Program, which is now administered by FEMA (Federal Emergency Management Agency):

“The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations. These efforts help mitigate the effects of flooding on new and improved structures. Overall, the program reduces the socio-economic impact of disasters by promoting the purchase and retention of general risk insurance, but also of flood insurance, specifically.” (from www.fema.gov)

Flood insurance covers direct physical loss caused by “flood.” In simple terms, a flood is an excess of water on land that is normally dry. This includes events such as overflow of tidal waters, runoff, surface water, mudslides and mudflows. (***See below for the “official” definition) To be eligible, you must live in a community that has agreed to adopt flood control measures. There is also a 30-day wait period for new applications, unless it coincides with a new loan or home purchase.

Typically, almost any building that is walled, roofed, principally above ground and fixed to a permanent site is eligible. Most policies are on an Actual Cash Value (ACV) basis, which means that you would receive the depreciated value of your structure in event of a loss. Replacement cost coverage can be purchased, though it will not pay more than the policy limit. Also, coverage for your contents is not included in the basic flood package—that coverage would need to be purchased separately.

As we have seen, many weather events in the past few years have created disasters we haven’t seen in quite some time, if ever. And while your home may be in an area that has never flooded before, there is always a chance that something could happen. Please contact your local independent insurance agent to learn more about what is and isn’t covered, and how flood insurance could potentially help you. Here are several links from FEMA that provide some additional information, too.

Summary of coverage: https://www.fema.gov/media-library/assets/documents/12179

Overview: https://www.fema.gov/national-flood-insurance-program

FloodSmart.gov: https://www.floodsmart.gov/floodsmart/

Each insurance policy is unique. While some generalities can be made, each situation should be reviewed on a case-by-case basis. This is not considered advice on any specific insurance matter. Please contact an agent to discuss any concerns you may have.

***Here’s the official definition used by the National Flood Insurance Program.

A flood is (1) “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 (at least one of which is your property) from a. overflow of inland or tidal waters; b. unusual and rapid accumulation or runoff of surface waters from any source; or c. mudflow*. (2) collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined in A.1.a. above.

^Please note that this is a generic definition. Depending on your circumstances, application, and elected coverages, things might change. Please fully review your coverage and/or application with a licensed agent to be clear on what is and isn’t covered.