With the advent of spring, comes the construction season. Many contractors have been waiting all winter to start digging basements and building new homes and commercial properties. It’s during this period that there is an additional level of flood risk that might not be so apparent. It’s during this time when yards are not yet graded, or grass is planted, when the ground can be your worst enemy. Imagine this: a hard rain hits and doesn’t let up. The construction crew calls it a day and heads home. The next morning they arrive back at your property only to find that all of the rain from the night before has found its way into your new basement. Your new furnace, stud walls, and other material is floating in what used to be your new basement. It might come as a surprise to learn that damage from this type of incident isn’t covered under your standard homeowners insurance, or builders risk policy.
As you can see with this example, even if you don’t live anywhere remotely near water, unexpected occurrences can result in flooding. Homeowners’ insurance policies simply don’t cover water damage due to floods. You must purchase a separate flood insurance to cover your home for these types of losses. Now is the time to find out whether or not your home, business or other property is protected.
Flood Insurance Protection
Flood insurance offers financial protection for the loss of a structure and the contents inside, due to a covered event. If features of the building such as the foundation, walls, floors, electrical and plumbing are damaged, as well as property like furniture, appliances, and electronics, these would likely be covered by flood insurance. However, flood insurance doesn’t cover everything. Specifically excluded from coverage is loss of trees, landscaping and other aspects of the real estate’s landscape.
Additionally, as mentioned in the above paragraph, flood insurance applies to a covered event such as the result of heavy rains, breeched levies, or overflowing riverbanks. If the flooding is the result of negligent maintenance, like a slow leak caused by a cracked pipe or roots that have grown into the plumbing system, this type of damage would not be covered by flood insurance.
Buy Flood Insurance with Local Agents
For the most part, flood insurance for business owners, homeowners, and renters can be purchased from a local insurance agent. Thought it is generally bought locally, the National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA). Because it is a public program, the insurance rates are set nationally, and regardless of the insurance agency from which you buy it, your premium will be the same. The rates are dependent on a variety of factors, such as the structure’s construction date, the type of property, the building’s level of risk, and more.
While having flood insurance is optional for many homeowners, homes that are located in high-risk flood areas and which have mortgage that originate from federally regulated or insured lenders must have flood insurance.
Additionally, there’s usually a 30-day waiting period before your policy goes into effect, but there are some exceptions for certain situations.
Finally, though payment for a flood insurance policy must be made for the full year’s premium at the time of purchase, discounts are available for properties located in communities that participate in the Community Rating System (CRS). This CRS recognizes communities that work consistently to exceed federal floodplain management practice requirements.
A home or business doesn’t have to be located near a body of water for a flood to occur. Floods can happen after a hard, fast rain or even a poorly timed rain – when the ground is still frozen or otherwise unable to absorb water quickly.
It’s probably a good idea to speak with a local insurance agent to see if you should carry flood insurance, even if it isn’t required. Considering the big picture, flood insurance can be a significant bargain compared to the thousands of dollars worth of damage that water can cause.