Moorhead,MN, March 30, 2009--Clay County Sheriff's Dept. and local Search and Rescue volunteers check on residents along the Red River. Andrea Booher/FEMA

A Flood Insurance Primer for New Homeowners

Did you know that basic homeowner’s insurance does not cover floods? Many new homeowners are not aware of this fact. That can cost them.

Floods occur all across the United States—in all 50 states, in fact—and often strike with little or no warning. One moment, you may just have a little water in your basement. The next, your living room could have two feet of water in it. Floods are scary and can be very dangerous, and a decent amount of flood claims happen outside of traditionally known flood zones. This makes it imperative that a new homeowner has quality flood insurance.

There are some basics of flood insurance that every homeowner should be aware of. Read on to learn more about them.

What Flood Insurance Includes—And Doesn’t Include

Flood insurance is offered through the National Flood Insurance Program, or NFIP. NFIP is administered by FEMA (the Federal Emergency Management Agency). This kind of supplemental insurance covers up to $250,000 in structural damage, as well as up to $100,000 in content loss. Content, in this case, refers to objects like furniture.

Homeowners should know that the terms “flood” and “water damage” are not interchangeable. A flood is more about damage to the environment surrounding you, as well as your house. Water damage refers more to cracked or burst pipes, and is not covered by flood insurance.

Also, when it comes to the basement—probably the place where most floods begin—it is important to note that only essentials will be covered by flood Insurance. If you have a finished basement that has a high-definition flat-screen TV, that TV will not be covered by flood insurance.

But Do You Really Need It?

The short answer is: yes. Many homeowners with flood insurance only have it because they’re required to purchase it. For example, they may live in flood-prone areas, like near the mouth of a river. However, even if you don’t live near a river or other body of water, you should still consider flood insurance. Many areas that have been hit in the past by hurricanes weren’t necessarily considered high-risk areas in terms of flooding. Many people in those areas still had damage to their homes, though. Unfortunately, not all of them had flood insurance.

Flood Insurance Can Cost Less Than You Think

Even if you don’t live in a flood-prone area, you should still consider getting flood insurance. It can cost less than $1,000 a year to protect your home from flood damage. If you’re ready to insure your home against damaging floods, contact an ABCO agent today to compare rates.

Get the Facts from ABCO: Flood Insurance 101

ABCO can help with Flood Insurance

No matter where you are in the world, natural disasters are bound to happen. One common and highly destructive natural phenomenon is flooding. In some areas, flooding may be an annual event. In other places, it can be a once in a lifetime incident. Extreme flooding is something that is out of human control, but there are ways to protect yourself, your loved ones and your belongings. Most people don’t have all the facts about flood insurance – or even know where to find them. Truth be told, there are things you might not know about your insurance that will be critical to know if the floods gates do indeed open.

Homeowner’s Insurance

This may come as a surprise, but a basic homeowner’s insurance policy does not, in fact, protect you from flooding as a part of your coverage. You need to seek out flood insurance and determine your premium payments based on factors like how much coverage you need, your deductible, your age, your level of risk, the elevation of your home, and even the type of home you own – just to name a few. Flood insurance is completely supplemental and most people are confused by where they can find flood insurance and why it might be helpful to have. ABCO Insurance Agency is a great place to learn about and fully understand your flood insurance needs.

Flood Insurance Facts: Did You Know?

Coverage basics are present in most insurance policies but flood insurance has specific coverage details. That means it’s critical to understand clearly what is and is not covered under that policy. Thankfully, flood insurance policies cover most of the physical damage that may happen to your property and possessions because of a flood. Here are just a few examples of what is – and isn’t – covered under typical flood insurance.

  • Coverage: To start, you have coverage with flood insurance for all electrical and plumbing systems. Though these may be, in full or in part, outside the house, they are still covered as building property. There is also coverage for certain built-in appliances such as refrigerators, stoves and dishwashers. They also cover some permanently installed furniture items. These would include portable dishwashers, bookcases and microwaves.
  • No Coverage: There is not coverage through your flood insurance for any outside furniture or appliances. This could be decks or patios, fences, pools or hot tubs. These items are not covered by your insurance in the event of a flood even though these items are still your property. To cover some of these items, you would need to seek out special types of insurance to protect them. There is also no coverage for water damage that may have been preventable.

What’s the Best Coverage for Me?

To start determining which coverage is the best for you, you must first determine whether you are covering a residential property (such as your home) or a commercial building (such as a business). Residential coverage policies are different from commercial coverage policies, and both types have distinct, important factors to consider. With residential coverage, you can be protected if you are a homeowner, renter, condo owner or renter, or other cases of commercial building rentals. With commercial policies, you can get coverage for the building plus the contents inside that building, or just the contents of the building alone.

After determining which type of coverage you need, you will also need to check into your risk map. This map will help give home and business owners an idea about the risk or probability of flooding might be in their area. Often, homes or commercial businesses are regulated by law to have flood insurance if they are deemed close to or inside a high-risk flood area. However, the government required coverage may not be enough to cover all your needs. Lower areas of risk might not have these federal requirements, but floods don’t always follow the same map and could happen at any time and in any place. Using the map as a guide for where the risk areas are will help buyers understand the pattern of a flood, and help determine if flood insurance is necessary.

Knowing which coverage you need and where you’re located on the risk map will give you a much clearer picture about the coverage you’ll require for your property. The rates for each type of coverage and areas are also dependent on such factors as date of construction and type of home you own or rent, the elevation of your residential or commercial building, and many other details. If you do need flood insurance, there are professionals to assist you in finding a plan with the most coverage for a price you can afford.

Knowledge Is Being Prepared

After you have acknowledged flood insurance is a good investment no matter where you live, the next step is to contact a professional – like those from ABCO Insurance – to help ensure you are receiving the coverage you need and deserve. Taking a closer look at your own home or commercial property and analyzing the risk map will also outline what level of coverage you might need. Even though you might not be in a direct risk zone or have never needed flood insurance in the past, there is never a wrong time to protect your spaces and your belongings.

From there, deciding on premiums, deductibles, and coverage are the final steps. Before disaster strikes in your area make sure you have the plans in place to protect the things you love and care about. Each flood insurance policy will be different and unique to your needs, but determining your risks and your options about what you can do to insure your home, property, or business is a great first step. ABCO Insurance Company is trained and educated on flood insurance and is there to help you learn, understand, and pay for such an important part of keeping your belongings protected.