Flood Insurance

FLOOD

In Minnesota, flood damage due to heavy rains s a potential cause of significant loss. Flood protection is not included in commercial property coverage and therefore this type of policy must be purchased by businesses looking for protection from such an exposure.

The flood policy covers buildings and their contents on either a replacement cost or actual cash value basis against direct loss by flood.

At CCI Underwriters, we will review the different types of options for Flood coverage and well as provide you with a premium indication for purchasing this important form of insurance protection. We can assist with reviewing the coverage’s as well as how the coverage applies in the event of a loss.

Keep in mind that not the entire State of Minnesota is in a Flood zone. Some zones are at a higher probability of flooding than others. If we look at statistics on past flood claims, 25% of flood losses were in the zones with less probability of flooding. Keep this in mind when reviewing this coverage.

Flood Insurance

Your homeowners policy doesn't cover damage from flooding, and you can't simply purchase flood insurance as an endorsement to your policy like you might expect. Instead, you must purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program (NFIP), a partnership between the Federal Emergency Management Agency (FEMA) and the private insurance industry. A flood insurance policy can offer you protection for both the building and its contents. You are eligible to purchase flood insurance if your community is one of the approximately 19,000 nationwide that participate in the National Flood Insurance Program. The participating communities must adopt certain floodplain management practices in exchange for the availability of flood insurance for their residents.

Do you need flood insurance?
You should consider purchasing flood insurance even if you don't live in a high-risk area for floods. According to FEMA, approximately 25 percent of all flood insurance claims come from areas that are at low to moderate risk for floods. Even if you don't live near the ocean, a river, or other body of water, factors such as storms, melting snow, inadequate or overloaded drains, or hurricanes can cause serious flooding. As long as your community participates in the NFIP, flood insurance is an option worthy of consideration. If you are buying a home located in a high-risk flood zone, you are required to purchase flood insurance as a precondition for obtaining a federally-backed mortgage.

How do you purchase flood insurance?
If you decide you want or need flood insurance, the perfect place to start is by asking your homeowners insurance agent for assistance. They may be able to write a flood insurance policy for you. Buying homeowners insurance and flood insurance policies through the same company may have advantages. If we can't offer you flood insurance, you can call the NFIP Telephone Response Center at 1-888-CALL FLOOD, extension 445.

How much flood insurance can you get?
A flood insurance policy offers flood protection for both your home and its contents. You can purchase up to $250,000 worth of coverage for the building itself, and up to $100,000 worth of coverage for the contents. However, a flood insurance policy is not a catchall. For example, it offers some degree of protection for flood-related basement damage, but doesn't cover all types of damage (sewer backups, for instance, would not be covered unless directly related to a flood).

How much does flood insurance cost?
Flood insurance costs vary widely, depending upon your location. However, if you live in a lower-risk area, you can typically reduce the premium by purchasing a lesser amount of coverage.

What else should you know about flood insurance?
You should be familiar with several miscellaneous facts about flood insurance. First, you can purchase flood insurance most any time if you live in a participating community (except when flood is imminent--i.e., an impending hurricane). You generally have a 30-day waiting period before the policy becomes effective. Second, you can purchase flood insurance even if you live in a high-risk region for floods. As long as your community participates in the NFIP, insurance companies will be able to offer you a policy. Third, flood insurance policies don't cover flooding from wind-driven rain or damage from hail. Your homeowners policy will likely cover these situations.

Finally, flood insurance offers some protection for flood-related basement damage, but doesn't cover all types of damage. It ordinarily covers items like furnaces, hot water heaters, foundation elements, stairways, and oil or natural gas tanks, as well as appliances such as clothes washers and dryers, and freezers. It doesn't cover basement structures such as finished walls, floors, ceilings, or personal belongings like furniture or clothes. Your homeowners policy doesn't cover basement flooding, period. So, although flood insurance doesn't cover every situation, it's your best bet for dealing with basement flooding expenses.