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Standard
homeowners
policies do NOT cover flooding.
You can purchase
flood coverage directly through
your homeowners
insurance agent. However, the
policy is
provided by the Federal Flood
Insurance
Program ( 888-379-9531,
http://www.floodsmart.gov
).
Replacement
cost
coverage is
available for
the structure of
your home, but
only actual
cash value
coverage is
available for
your
possessions.
Replacement cost
coverage pays to
rebuild your
home as it was
before the
damage. Actual
cash value is
replacement cost
coverage minus
depreciation so
that the older
your possessions
are, the less
you will get if
they are
damaged. There
may also be
limits on
coverage for
furniture and
other belongings
stored in your
basement.
Flood
insurance
is available
for renters
as well as
homeowners.
You will need flood
insurance
if you live in a designated
flood zone.
But flooding
can also
occur in inland areas
and away
from major
rivers. Consider
buying a flood insurance
policy if
your house could be
flooded by
melting snow, an
overflowing
creek or pond or water
running down
a steep hill. Don’t wait
for a flood
season warning
on the evening
news to buy a
policy—there is
a 30-day
waiting
period
before
the coverage
takes
effect.
The federal
flood insurance
program
provides
only
limited
coverage. If you need more
coverage
than the federal program
provides,
additional coverage known
as “excess”
flood insurance
is available
from specialized
insurance
companies.
Depending on the
amount of
coverage
purchased, an
excess flood
insurance policy
will cover
damage above the
limits of the
federal program
on the same
basis as the
federal
program—replacement
cost
for the
structure
and actual
cash value
for the contents.
Excess
flood insurance
is available
in all parts
of the
country—in high
risk flood zones
along the coast
and close to
major rivers as
well as in areas
of lower
risk—wherever
the federal
program is
available. It
can be purchased
from specialized
companies such
as Lexington
Insurance
Company, part of
American
International
Insurance
Company, and
Lloyd’s through
independent
insurance
agents,
or from
regular
homeowners
insurance companies that
have
arrangements with
a specialized
insurer to provide
coverage to their
policyholders. |
