The eastern seaboard and the Gulf of Mexico are still in the midst of their hurricane seasons. Here in Florida, we know exactly how devastating hurricanes can be, and one of the most widespread and prevalent causes of damage is flooding.
Storm surge, heavy rain and high wind can all combine to cause pervasive flooding, particularly in low-lying areas. The repair costs are often astronomical. Many people worry whether they have insurance to protect them against flood damage.
To receive coverage for floods, including those from hurricanes, you will need to buy flood insurance. In most cases, you will receive your coverage from the National Flood Insurance Program (NFIP).
What is an NFIP flood insurance policy?
The cost risks of flooding are more than most insurance carriers can assume. As a result, most homeowners insurance policies do not cover flooding from weather. While they might cover floods from hazards like burst pipes, the flooding that might result from a hurricane likely won’t have coverage.
Flood insurance usually is purchased separate from homeowners insurance. The NFIP is a government-backed program that allows residents of flood-prone areas to buy the policy they need. In the event that a hurricane causes a flood, the property owner can file against their flood policy for the related damage. Many residents of designated flood zones must buy coverage if they have a mortgage. However, any Florida resident can benefit from a policy.
Yet, NFIP policies contain very strict limits. You’ll have to pay close attention to the terms of your policy to ensure you obtain enough coverage.
What do NFIP policies look like?
Under an NFIP flood insurance policy, you can receive dwelling coverage and possessions insurance up to the following limits:
- $100,000 possessions coverage
- $250,000 dwelling insurance
You can buy less coverage than these limits, as long as the limits you choose match your property value. If you require more coverage, you might be able to buy private flood insurance. Certain insurers sometimes offer these policies as part of high-value homeowners coverage.
NFIP policies contain limits and exclusions to certain types of damage. For example, policies usually will not cover damage to outdoor items or landscaping. They might also limit coverage for your basement.
You will also have to choose a deductible. This is the amount that you must pay towards the cost of your damage before your policy pays. Most NFIP policies have deductibles between $1,000 & $10,000.
Additionally, policies will only pay cash value for damaged belongings. These are items' used values at the time the flood occurs. However, you will receive replacement cost coverage for dwelling damage.
Remember, flood insurance is not a substitute for the coverage that your homeowners policy might provide for other hurricane damage. Therefore, make sure that your policy works in tandem with the rest of your property coverage.