Welcome to the Homer Yost Agency Herald, a quarterly publication dedicated to providing timely information and tips to insure a better life!   

Who is at Risk

of Flooding? 

The abundance of rain we have had this spring has certainly been a cause for concern, although most of us who do not live in a flood prone area are under the impression that we are not at risk of suffering damage from a flood.   

The truth is that a flood loss can happen to anyone - whether their home or business is located in a high risk flood zone or not.  In fact, flooding is the nation's #1 natural disaster.  Floods can be caused by a number of factors, such as heavy rainfall, melting snow, hurricanes, broken water mains, inadequate or overloaded drainage systems and more.  According to FEMA (The Federal Emergency Management Agency), nearly 25% of all National Flood Insurance Program claims come from outside mapped high risk areas (see http://www.fema.gov/national-flood-insurance-program .)

Since flood damage is not covered under homeowners or commercial property policies, a separate flood insurance policy through the National Flood Insurance Program is needed to provide protection from financial loss due to flooding.  A flood policy provides important coverage for this type of loss, but there are some significant differences between a flood policy and traditional property insurance policies (i.e. Homeowners, Businessowners, Commercial Package Policies) that you should be aware of.  Here are some examples of these important differences:

1.  There is usually a 30 day waiting period before coverage goes into effect.

2.  Some items are only covered for their Actual Cash Value (ACV), not Replacement Cost (RC).  Examples include: carpeting and personal property.   

3.  A flood policy does not provide coverage for temporary housing.

4.  A flood policy does not provide coverage for financial losses due to business interruption.

5.  Deductibles will apply separately to building and personal property claims.

6.  A flood policy has coverage limitations in areas below the lowest elevated floor and in basements.  Examples of items not covered in this area include: paneling, carpeting and other floor covering, drywall, clothing, furniture, electronic equipment and kitchen supplies.

7.  Homes may be insured to a maximum of $250,000 for the building itself; and $100,000 for contents.

8.  Non-residential buildings and contents also have maximum coverage limits.