What you should know about flood insurance
You’ve probably heard this story before — someone loses a home due to a flood and learns after the fact that standard homeowners insurance doesn’t cover flood damage.
At the Insurance center of Milwaukee, we want to talk to you about the risks you may face – before a loss occurs – so you can determine what insurance coverage is appropriate. Spring is a prime season for flooding, so now is a good time to review flood insurance.
In 1968 the U.S. government created the National Flood Insurance Program (NFIP). Available to homeowners, renters, and business owners, this insurance often is required to obtain a mortgage in areas at high risk of flooding. You also might want to look into a policy just for peace of mind, even if you don’t live next to a river that may flood. According to the NFIP, nearly 25% of the program’s claims occur in moderate- to low-risk areas. Check out the questions and answers below to help determine if flood insurance is right for you.
Is flood insurance available in my area?
To participate in the NFIP, a community must adopt and enforce a floodplain management ordinance with rules regarding construction in certain flood-prone areas. In exchange, the government makes flood insurance available within that community. Most communities in Milwaukee and Waukesha counties participate, but just give us a call at 414-744-6614 and we’ll help you determine if your city participates. You can also visit http://www.fema.gov/fema/csb.shtm
What does it cover?
The NFIP provides coverage for both the structure and its contents. Coverage for contents is optional in some cases, giving you flexibility in choosing coverage. Please note that not all structures can be covered (for instance, a building completely over water).
Keep in mind that you typically can’t purchase flood insurance and have it take effect the next day. There is usually a 30-day waiting period. (There are exceptions to this rule however, particularly when the insurance is required by a lender and is purchased during the process of securing a mortgage.) If you think you need flood insurance, don’t wait to buy a policy!
How much does it cost?
As with all insurance policies, the cost of flood insurance varies depending on your situation. If your home or business is in a high-risk area, such as a “special flood hazard area,” your premium naturally will be higher than those in low- or moderate-risk zones. Premiums are based on how old the building is, how many floors it has, the location of its contents, your deductible and more. Renters insurance is typically less expensive, as renters generally insure their belongings and not the building.
Where can I find more information?
As always, we are happy to help you determine your insurance needs. Stop by our office in Bay View or call us at 414-744-6614.