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12/4/2012 - Think homeowner's insurance includes flood coverage? Think again

Homeowners insurance often doesn’t cover flood damages.

When a storm or weather event strikes hard enough to cause damage to a residence or apartment building, homeowners and renters look to their property insurance policies to help fix or replace what's been destroyed. But as recent and previous events have caused many to realize, the coverage they thought they had is often not in place.

After experiencing one of the most brutal hurricanes to affect the East Coast, a considerable number of Americans were surprised to learn that their homeowner's insurance policies did not include flood insurance. In fact, even though flooding is the most common type of natural disaster that occurs, most people aren't protected from high water levels that can wreak havoc on the average consumer.

Those who have coverage buy it through the NFIP. Fortunately, policyholders have a recourse they can turn to. For more than 50 years, the Federal Emergency Management Agency has operated the National Flood Insurance Program. Through private insurers, consumers can buy a plan that can help them recover should flooding impact their homes. Though policies vary, a year's worth of coverage can cost as little as $129, according to FEMA.

What flood insurance does and does not cover. Like standard homeowner's insurance, flood insurance is quite comprehensive as it pertains to the things that are covered. For instance, most policies have a coverage maximum of $250,000. Up to that amount, a flood insurance policy will pay for the cost to repair a property. As for someone's personal possessions or material belongings, those are also covered, but contents generally can only be insured for up to $100,000.

It's important to be aware, however, of some of the things that may not be covered. For example, if a flood is destructive enough to require someone to leave their home for awhile and rent a hotel for a night, individuals won't be able to be compensated for their living expenses. However, they may be able to through their standard homeowner's policy.

Something else that flood insurance traditionally doesn't provide for are small floods. As a general rule, a flood that takes up two acres worth of land would be considered serious enough to warrant a claim. This means that if something breaks inside the home, such as a water pipe, and the flooding is confined to a small area, flood insurance likely won't be able to compensate homeowner's for the damage that's been done. Once again, however, a basic homeowner's policy may take care of these costs.

Why people shouldn't procrastinate. Some may think that if they don't have a policy in place, they don't have to worry about getting a plan until a storm is imminent. This perception may lead to people thinking that so long as they purchase a plan prior to a storm's arrival, they'll be protected.

But that's not how flood insurance works.

Though there are a few rare exceptions, flood insurance has to be purchased several weeks in advance of a pending storm if they want to ensure they're belongings are covered. That's because there's a lag period in which a flood insurance plan goes into effect, which is usually 30 days. In other words, the sooner the people realize that they don't have flood insurance, the better, provided they take action and protect themselves from potential damage.

For less than 50 cents a day, consumers can spare themselves from thousands of dollars worth of damage by purchasing a flood insurance policy. Speak with an independent Selective agent about adding flood coverage to a homeowner's, business owners, or renters insurance policy.

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