It’s summer time in Arizona and you’re on vacation up north, getting away from the heat for a week. While you’re away, a series of severe thunderstorms cross through the Phoenix valley, and more rain falls in a few short hours than the storm sewers can handle. While your home was once was high and dry, it’s now surrounded by water and it’s still rising. When you return from fun in the sun, you find your yard dry, but the flooring in your home soaked with rainwater, and a distinctive line along your walls showing the high-water mark. Much of your home will have to be gutted and replaced. Are you covered for such a loss? If you have a flood policy you are.
As you can see in the example above, and as many of our neighbors experience firsthand last year, any home can be subject flooding. Many people also learned the hard way that their homeowners’ insurance policy doesn’t cover water damage due to floods. A flood insurance policy is the only way cover your home for losses due to flood. So, the question is: Are you properly protected?
What Flood Insurance Does & Doesn’t Cover
Flood insurance protects the structure of your home or business and the contents inside of it. When it comes to the structure, flood insurance will cover the building itself, the foundation, floors, walls, electrical, plumbing, and heating and cooling units. Contents coverage includes personal property such as appliances, clothing, furniture, electronics, accessories and more. However, if there is damage to trees, landscaping and other similar features of your landscape, a flood policy will not reimburse for these types of losses.
It is also important to note that not all water damage is considered to be flooding. A flood is defined as: “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: Overflow of inland or tidal waters; Unusual and rapid accumulation or runoff of surface waters from any source; Mudflow; or 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 above.” With that said, water damage due to a backed-up sewer, or a broken pipe would not be covered by flood insurance, but may be covered by your homeowners insurance with proper endorsements.
Where to Buy Flood Insurance
Business owners, homeowners, and renters and can buy flood policies from a local insurance agency such as Imes & Associates. Flood insurance itself is made available through the National Flood Insurance Program (NFIP) and is administered by the Federal Emergency Management Agency (FEMA). Rates are set by these federal agencies, and are the same regardless of the insurance agency from which you purchase your policy. The rates do vary based on location, and are dependent on a variety of others factors including the structure’s construction date, the type of property, and the building’s level of risk.
Flood insurance is totally optional for many homeowners, however, it may be a requirement if your home is located in a high-risk flood area and your mortgage originates from a federally regulated or insured lender.
There’s usually a 30-day waiting period before your policy goes into effect, but there are some exceptions for certain situations. Payment for your policy must be made for the full year at inception, but discounts are available if the city you live in participates in the Community Rating System (CRS). The CRS program recognizes communities that exceed federal floodplain management practice requirements.
Are You Covered?
Remember, you don’t have to live near the water to have a flooding disaster. Floods can happen in the middle of a desert after a long, hard rain or even a poorly timed rain. Now is the time to take a look at your risk for flood, and determine whether a flood insurance policy should be a part of your overall insurance program.