Flooding can affect anyone regardless of where you live, but those of us in Louisiana see our fair share of flooding events! Even a small amount of standing water from a major storm, interior leak or burst pipe can result in devastating costs. It’s a smart choice to find coverage before you’re faced with standing water. The cost of coverage is minimal compared to paying tens or even hundreds of thousands of dollars in damage.
Reason 1: Homeowners Policies Don’t Cover Floods
A customary homeowners insurance policy tends to cover the most common types of loss that are standardized across all policyholders, and flooding doesn’t fall into that category. Flood restoration is too expensive for insurance companies to include in general policies. Although 50 or more years ago flooding was covered, insurance companies phased out that coverage and the federal government stepped in to cover the gap with the National Flood Insurance Program. Both building and contents coverage are offered.
Reason 2: Floods Are More Common Than People Think
Floods are the number one disaster in the US according to FEMA’s Floodsmart.gov, and they aren’t always due to major events. “Poor drainage systems, summer storms, melting snow, neighborhood construction, and broken water mains can all result in flooding.” Policyholders who live outside of high-risk flood areas file, on average, over one-third of all NFIP flood insurance claims. NFIP also reports that if you do live in a high-risk area, you have a 25% chance of facing a flood event during your 30-year mortgage.
Reason 3: You Don’t Need To Live In A High-Risk Flood Area To Be Affected
Regardless of where you live, you can be susceptible to a water main break or a flash flood. FEMA states that even one inch of standing water can cause $25,000 worth of damage to your home and 18 inches can result in damage to critical infrastructure like electrical, heating and cooling systems, as well as your home’s foundation.
Reason 4: Disaster Assistance Isn’t Always Available – Or Ideal
Disaster assistance only happens when the President declares a disaster. However, history shows that this happens in less than half of cases, so those who are underinsured are left dealing with major expenses. If you do qualify for federal financial assistance, it comes in the form of a loan that needs to be repaid monthly over 30 years – generally costing homeowners much more than a flood insurance policy. For example, a loan for $100,000 can cost $240 per month for 30 years. Flood insurance, on the other hand, averages about $700 per year within floodplains and as low as $100 per year for a preferred risk policy in low and moderate-risk areas.
Reason 5: There Is A 30-Day Waiting Period
A 30-day waiting period is standard for a flood policy to become effective (some exceptions apply). Homeowners are not able to purchase or increase their policies during a “loss in progress.” It’s smart to plan ahead and buy coverage now to protect your home later.
To find out more about FEMA’s National Flood Insurance Program (NFIP) or to see if you live in a high, moderate or low-risk area, visit floodsmart.gov or talk to your private insurance professional.
About CJ Claim Services
Our expert team at CJ Claim Services helps you navigate the insurance claim process. We fight for fair and balanced settlements for policyholders. If you’ve suffered property damage, we’ve got you covered! Whether you have a new claim, a previously denied claim, or you’d like an expert opinion on a previously underfunded claim, we can help. Contact us today at 504-252-8204 for a free assessment!