The Importance of Having Flood Insurance

Last month, Nebraska and Iowa saw one of the most catastrophic floods in history. In Nebraska alone, damage to private homes and businesses has reached $85 million. There is an estimated 2,067 homes and 341 businesses that have suffered damage from the flood, and the numbers continue to rise.

Floods are a common and costly natural disaster and cause millions of dollars in damage every year. Floods cost America, on average, $8.2 billion each year. Unfortunately, homeowners and renters insurance policies do not cover flood damage.

If you live in a high risk flood area, you may already know that often, mortgages will require you to have flood insurance. But if you don’t live in a flood zone, you’re probably wondering why you need flood insurance.

The fact is floods can happen anywhere. More than 20 percent of flood claims come from properties outside the high-risk flood zone. Many who suffered flooding in Nebraska were not in a flood risk zone. You can see from the image on the right how extensive the flooding was and how far from the flood plain the water reached.

For insurance purposes, a flood is defined as any water damage which affects you and at least one other neighboring property. Homeowner’s and renter’s insurance policies do not cover flood damage. This leaves a big possibility that your valuables and your home may get damaged or ruined, forcing you to pay out of pocket for any repairs or replacements.

Recovering from just one inch of water inside your building can cost about $27,000 (FEMA). Hazards include everything from flash floods to your neighbors swimming pool overflowing. And being outside of the flood plain makes flood insurance very affordable. For example, if your house is located outside of a flood zone and is worth around $150,000, your flood insurance would probably be under $300.

This isn’t only for residential properties either. Commercial buildings are also affected and can suffer serious damage.

Chastain Otis can help you get the flood insurance you need, for both residential or commercial properties. The rates for flood insurance in the National Flood Insurance Program (NFIP) are standardized and regulated, based on factors such as:

• Year of building construction
• Number of floors
• Location
• Building occupancy
• Flood risk
• Location of lowest floor in relation to the Base Flood Elevation on the flood map
• Deductible and amount of coverage

That means, essentially all policies are the same in the NFIP, the only difference is the coverage amount and/or deductible.  There are private flood markets available in some areas.   Your independent agent can tell you if they are an option and how these policies differ from NFIP plans. Again, if you live outside a flood zone, your flood insurance can be inexpensive, so why not at least consider it?

Floods are costly, and not only to a home or business, but to the personal property inside. Don’t risk the damage to your property and your wallet. Contact Chastain Otis and we will get you the coverage you need at a price you can afford with our local independent insurance agents.