Floods happen regularity in the USA. In the past several years, we’ve witnessed whole cities submerged in the spring flooding along the Mississippi River. But, floods can happen in unexpected locations and for unexpected factors. Congress established the National Flood Insurance Program (NFIP) to offer Business Flood Insurance coverage for the danger of flooding.
The standard homeowner coverage (HO-3) defines flooding as follows:
“…A general and temporary condition of partial or complete inundation of normally dry land areas because of: 1). The overflow of inland or tidal waters; 2. The odd or rapid accumulation or runoff of surface waters from any source; or even 3. Mudslides.
Remember Hurricane Katrina? The storm winds blew flooding waters into regions that hadn’t had flooding before. The insurance industry denied thousands of promises, attributing the damages to flood. Thousands of property owners that had been nowhere near a flood plain had their claims denied because they didn’t have flood insurance.
Therefore, here are seven common myths about Flood Insurance.
Hint #1: Homeowners, tenants, and business property insurance policies cover flood damage.
No, homeowners, tenants, and business property insurance policies don’t cover floods. The NFIP coverage is another policy which will cover flood damage to your home or business. Contents coverage may also be added into the flood coverage. Policies are available to land owners in addition to property tenants, whether home or business.
Hint #2: Just homeowners and business owners may purchase flood policies.
Truth is that the majority of homeowners, renters, condominium owners, and businesses in NFIP participating communities can purchase flood policies. Policy limits are:
O Home and Condo Owners – $250,000 in atomic coverage, $100,000 in materials coverage o Renters – $100,000 in materials coverage o Business owners and tenants – $500,000 in structural coverage, $500,000 in materials coverage
Hint #3: You can not buy flood insurance if you’re in a zone that is insecure.