The Truth About Flood Insurance
Flood protection is a special insurance that covers property damage in the event of a flood. Insurance companies usually refer to typographical maps to determine which properties are vulnerable to flooding.
The National Flood Insurance Program defines flooding as a common, short-term condition where two or more acres of land that is normally dry or two or more properties have become inundated as a result of the overflow of water.
The price of the insurance varies depending on the property’s risk level, the amount of insurance purchased, and what it covers. It’s available to condo owners, commercial owners, renters, and homeowners.
A home can be insured for up to $250,000, and a home’s contents can be insured for up to $100,000. Renters’ personal property can be insured for up to $100,000.
A building and its contents can be insured for up to $500,000 by non-residential property owners. On average, Americans pay about $700 per year for flood protection.
Businesses and residents, whose lenders are insured and federally regulated, are required to purchase flood protection if they live or work in a Special Flood Hazard Area. It is required that they carry the insurance until the loan has been paid in full. For new policy holders, there’s usually a 30-day waiting period.
There are three standard flood protection policy forms; Dwelling, General Property, and the Residential Condo Building Association Forms.
Owners of residential buildings containing 1-4 units, homeowners, and residential renters use the Dwelling Form.
Owners of condominiums use the Residential Condominium Association Policy.
Owners of residential buildings with five or more units use the General Property Form.
Some of the benefits of flood insurance are; flood protection claims are paid even if a disaster has not been declared by the President, there’s no requirement for payback, and flood protection policies don’t get canceled or non-renewed for repeat damage.