Think Again about Flood Insurance
With early, drastic flooding capturing everyone’s attention this spring, understanding the importance of flood insurance is a key message for our Walnut Creek communities. “Think again about flood insurance.” Take another look at what you have that needs protection, get fresh information about your risk and about the coverage available, and/or re-examine your past decisions about flood insurance.
The spring 2019 outlook from the National Oceanic and Atmospheric Administration is for an elevated flood risk for two-thirds of the contiguous United States at least until the end of May. The map shows that there is potential for moderate to major flooding in parts of 25 states. There is no better time than now to look at your flood insurance needs. Take a look below at flood insurance myths and facts to help you plan for the potential risk of flooding.
Flood Insurance Myths
Often those who do not have flood insurance have failed to purchase a policy because they are laboring under one or more misimpressions about the availability or expense of a policy. One way to turn this around is to confront those “myths” directly with to-the-point information. Here are a few more prevalent misunderstandings about flood insurance and the real scoop about those topics.
MYTH You can’t buy flood insurance right before or during a floodThe reality is that a flood insurance policy may be purchased at any time, as long as the community participates in the National Flood Insurance Program (NFIP). The fact that flooding is taking place or is imminent does not change that. It is true, however, that the coverage usually does not become effective until after a 30-day waiting period after the policy is issued. Any residents who are told that they cannot purchase flood insurance - or that they do not need it - should contact the NFIP call center at 800-427-4661 or visit www.FloodSmart.gov to be referred to a knowledgeable agent. Flood insurance is sold as a separate policy, so even if a person’s regular agent doesn’t handle flood insurance, it can be obtained from another agent who serves the area.
MYTH Flood insurance is only available for homeownersRenters of apartments, houses, and condominiums can get flood insurance. Owners of condominiums, houses, duplexes, and second homes can get flood insurance. Business owners can get flood insurance. Flood insurance is available to virtually anyone in an NFIP-participating community-to protect the structure and/or the contents, and the two coverages are purchased separately.
Renters and owners can get up to $100,000 coverage for the contents of their home. Businesses can get up to $500,000 coverage for the contents of their commercial structure.
Up to $250,000 of coverage for the building structure can be obtained, whether it’s an individual house or a condominium. A commercial structure can be insured up to a limit of $500,000.
MYTH Flood insurance is too expensive
Like all insurance, the premium rate depends on the risk factors, including location in terms of the chances, depth, and velocity of flooding; the design of the building’s structure, especially the foundation; and how high above the expected flood level the building is sited. The rates also depend on the size and value of the building itself and the amount of coverage selected.
For people in a low-risk zone, the base flood insurance premium can be as low as $127 a year for $20,000 in building coverage and $8,000 worth of contents coverage (fees are additional).
The NFIP offers a maximum of $250,000 in building coverage and up to $100,000 for contents.
To help determine how much coverage is right for a property owner, NFIP offers the Cost of Flooding Tool, which can help people in understand how expensive the damage can be, even from shallow flooding.
For the maximum ($250,000) building coverage and the maximum ($100,000) contents coverage, annual premiums would run about
▬ $ 1,800 in a low-to-moderate flood risk area;
▬ $ 3,300 in a high-risk flood zone (within the Special Flood Hazard Area); or
▬ $ 7,000 in a high-risk coastal area.
An overview of the coverage and costs of flood insurance - in clear language and with sources of more information - can be found on the FloodSmart website.
National Flood Insurance Program (NFIP) policies can be purchased through thousands of insurance agents nationwide. The agent who helps you with your homeowners or renters insurance may also be able to help you with purchasing flood insurance. Here is a list of participating Write Your Own (WYO) companies.