Floods occur every day in all 50 states, according to the National Flood Insurance Program (NFIP), a Federal program designed to reduce future flood damage through floodplain management and to provide homeowners and businesses with flood insurance. Homeowners insurance does not cover flood damage. To protect your home, consider purchasing a policy through the NFIP.

While many floods result from fierce storms, such as hurricanes or nor’easters, smaller events are the more common causes of damage. Snow melt or a heavy rain leaving behind just a few inches of water can result in serious, expensive damage to your home.

NFIP coverage is relatively inexpensive and is available in all participating communities. For homeowners in low- to moderate-risk areas, premiums may be as low as $119 per year, including protection for your property’s contents. Bear in mind that content coverage is separate, and a 30-day waiting period typically applies before your policy takes effect.

Little-Known Facts about Flood Insurance

The Federal Emergency Management Agency (FEMA 2005) reports that flooding causes over $2 billion in property damages each year in the U.S. Considering its relatively low cost and attendant peace of mind, flood insurance may be a valuable addition to your business insurance program. Be sure to remember the following when considering flood insurance:

• Floods can occur anywhere. Your business doesn’t have to be located near water to be flooded. Storms, melting snow, hurricanes, backup due to inadequate or overloaded drainage systems, and dam or levee failure can all cause floods. According to FEMA (2005), almost one-quarter of flood insurance claims are filed by those in areas with minimal flood risks.
• Other policies do not cover flood damage. Property insurance generally excludes damage caused by flooding. To protect your business location and belongings from flood damage, you can purchase a policy backed by the National Flood Insurance Program (NFIP), a division of FEMA. Coverage for non-residential property is available for up to $500,000 for the building and $500,000 for contents.
• Flood insurance is available everywhere. It doesn’t matter whether your flood risk is high, medium, or low, insurance is available as long as your community participates in the NFIP program. You can find out if you are eligible through their website at www.floodsmart.gov.
• Low-cost policies are available for low to moderate risk. According to FEMA, a preferred risk policy through the NFIP covering both a non-residential building and its contents costs just $500 per year.
• Contents coverage is separate. Coverage on the building itself is separate from contents inside the building. Therefore, property owners should note that contents coverage is not automatically included and should be requested. This also means that renters can insure their belongings, though their maximum available coverage may be less than what is available for owners.
• There is a customary 30-day waiting period. Plan ahead so you have flood insurance before you need it. There is typically a 30-day waiting period before coverage goes into effect.
• Keep in mind that federal disaster assistance is only available if the president declares a disaster, which may or may not occur when flooding hits your business. However, a flood insurance policy will pay whether or not a disaster is declared. Feel free to give us a call or stop by for more information. We’d be happy to discuss these options with you.