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Quick Facts You Need to Know About Flood Insurance

Hurricane Florence and the resulting floods have brought complete devastation to much of North Carolina. Some hope comes in the form of flood insurance, but these policies can be difficult to understand. And with water damage as the most common type of insurance claim in North Carolina and the rest of the country, it is important that all homeowners understand this type of insurance. Below are some quick facts you need to know about flood insurance to give you more insight into what it is and what it will cover:

  • Flood insurance is a separate policy from homeowner’s or tenant’s insurance. It has different rules, costs, and exclusions.
  • Homeowner’s insurance does not cover damage from a flood.
    • However, it will cover water damage when the water came from the sky.
  • Those that live in a zone that has been designated a hundred-year flood zone by the National Flood Insurance Program (NFIP) are required to have flood insurance if they have a federally-backed mortgage.
  • Homeowners and tenants can purchase flood insurance through the NFIP.
    • Flood insurance, however, can be expensive. Those living in a flood zone can expect to pay thousands of dollars a year, while those not in a flood zone will still pay approximately $700 annually.
    • For some individuals, there may be subsidies available.
  • Flood insurance has a 30-day waiting period. This means that those who purchase it after hearing about an approaching storm may not be covered once the storm hits.
  • Federal disaster assistance does not compensate for flood losses. It only provides loans that must be repaid after a disaster.
  • Flood insurance will insure up to a maximum of $250,000 for the structure of a home itself. It will provide an additional $100,000 maximum for contents within the home.
    • These maximums can be supplemented with additional insurance.
    • Built-in appliances such as a dishwasher will be covered under the category of the home’s structure. Smaller appliances such as washers and dryers will be covered under the contents category.
    • Currency, precious metals, and stock certificates are excluded from flood insurance coverage. A safe deposit box is a good place to store these items.
  • A homeowner must file a proof of loss within 60 days of a flood.
    • To do so, homeowners can call the NFIP Claims Call Center at 1-800-621-3362.
  • Most policies cover the holder for 30 days after they expire.
  • A homeowner may be reimbursed for expenses used to mitigate flood damage.
  • A flood insurance policy will be restricted to the footprint of the home’s foundation and, in some cases, a detached garage. Anything extending out from the foundation such as decks, swimming pools, and patios will not be covered.
    • Basements and underground living spaces can be covered under flood insurance policies, but there are exceptions. In these spaces, the actual structure will be covered but the contents will not be.

Those in flood zones should always have flood insurance in case a natural disaster strikes. However, to get the most out of the flood insurance policy, it is important that homeowners and tenants fully understand their policy. It will help them recover after a storm and determine what is covered under that policy, what is not, and if they need additional insurance for water damage. For more information about the quick facts you need to know about flood insurance, contact a knowledgeable attorney today.