Flood Insurance

Important Information regarding the National Flood Insurance Program

Most people believe (or hope) that their Homeowners insurance policy will cover them in the event of a flood. Unfortunately, they’re wrong—it won’t.

Coverage is available, however, through the National Flood Insurance Program, an agency of the federal government. As an independent agent, we’re able to offer this program through companies who administer the program on behalf of the government. As their representative, the Schultheis Insurance Agency is licensed to sell the coverage to you.

Remember: your home insurance policy does not provide any flood coverage; if a flood occurs, you will not be covered for any damage or losses that may result. Please take time to contemplate purchasing this important policy.

Below is a short overview of Flood Insurance. For more a more comprehensive explanation, please visit FEMA’s web site or contact any of Schultheis Insurance’s agents with any questions you may have. All our agents have undergone the National Flood Insurance Program’s education requirements.

Flood Insurance Statistics

The unfortunate high water conditions that occurred in June of 2010 provided lots of data in regards to people’s perception of their need for Flood Insurance. On June 19, 2010 the Wall Street Journal reported, “Only one in five homes in a high-risk flood zone carries flood insurance.” KFOR Oklahoma City found that in their area, “Out of the 186 homes flood waters reached, only three were covered by flood insurance.”

The Tennessean in Nashville Tennessee reported on June 13, 2010, “More than 10,640 residential parcels were damaged in Nashville alone… Many people are facing rebuilding costs amounting to tens of thousands of dollars, and sometimes more than $100,000. About half of the residential properties were not in the 100-year floodplain.”

Many people don’t feel that their property is at risk for flooding, but unpreparedness can be devastating. Take a moment and ask yourself: If there were a couple feet of water throughout my entire house, what would be damaged? What would need to be replaced? What would need to be repaired? And finally, would I have the financial means to pay for it without the assistance of flood insurance? These same questions can be applied to a business owner as well.

Please keep reading to help make the best decision regarding Flood Insurance and your home or business.

 

Am I In A Floodplain?

The first aspect that should be considered when evaluating your need for Flood Insurance is whether or not your property is in a floodplain. FreeFlood.com provides one of the simplest ways for you to determine your property’s flood risk level. For more information and a free analysis visit FreeFlood.com.

 

What Is Considered A Flood?

Flood insurance covers direct physical loss caused by “flood.” FEMA defines a flood as “A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:

  • Overflow of inland or tidal waters;
  • Unusual and rapid accumulation or runoff of surface waters from any source;
  • Mudflow; or
  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.”

How Much Coverage Can I Buy?

The National Flood Insurance Program offers two types of coverage. The first covers the physical dwelling itself and has a maximum limit of $250,000. The second type provides coverage for your personal property (or contents) and has a maximum limit of $100,000. Typically, a mortgage company will require coverage be in place for the dwelling, but the individual may have to leave the contents coverage to their discretion.

As long as the building meets the following criteria, it can be insured on a Replacement Cost Value (RCV).

  • The building must be a single-family dwelling, and
  • Be your principal residence, meaning you live there at least 80 percent of the year, and
  • The building coverage must be insured for at least 80 percent of the full replacement cost of the building or is the maximum available for property under the National Flood Insurance Program.

If these conditions are not met the building will be insured on an Actual Cash Value basis (ACV). ACV is the replacement cost at the time of the loss, less the value of its physical depreciation. Personal Property insured under the NFIP can only be insured on an ACV basis.

 

What Is Insured Under Building Property Coverage?

Coverage is provided for the building in two parts, surface and subsurface level. For the surface level, coverage is provided for:

  • Insured building and its foundation.
  • The electrical and plumbing systems.
  • Central air conditioning equipment, furnaces, and water heaters.
  • Refrigerators, cooking stoves, and built-in appliances such as dishwashers.
  • Permanently installed carpeting over an unfinished floor.
  • Permanently installed paneling, wallboard, bookcases, and cabinets.
  • Debris removal.
  • Detached garages (up to 10 percent of Building Property coverage).

On the subsurface (basement) level coverage is provided for:

  • Foundation walls, anchorage systems, and staircases attached to the building.
  • Central air conditioners.
  • Drywall for walls and ceilings (in basements only).
  • Electrical outlets, switches, and circuit breaker boxes.
  • Furnaces, hot water heaters, heat pumps, and sump pumps.

 

What Is Insured Under Personal Property Coverage?

Personal Property is insured on an Actual Cash Value basis. Coverage is provided for the building in two parts, surface and subsurface level. For the surface level, coverage is provided for:

  • Personal belongings such as clothing, furniture, and electronic equipment.
  • Clothes washers and dryers.
  • Food freezers and the food in them.
  • Carpets not included in building coverage.

On the subsurface (basement) level coverage is provided for:

  • Washers and dryers.
  • Food freezers and the food in them.

What Is Not Insurable With Flood Insurance?

Coverage is not provided for the following items.

On the surface level:

  • Damage caused by moisture, mildew, or mold that could have been avoided by the property owners.
  • Currency, precious metals, and valuable papers such as stock certificates.
  • Living expenses such as temporary housing.
  • Other exclusions apply, please check policy for complete list.

On the subsurface (basement) level coverage is excluded for:

  • Carpeting, area carpets, and other floor coverings such as tile.
  • Most personal property such as clothing, electronic equipment, kitchen supplies, and furniture.
  • Other exclusions apply, please check policy for complete list.