Even if you’re not in a high flood risk zone, your dwelling or rental property could be affected by rising waters. It only takes a few inches of water from storm surge from hurricanes and tropical storms, sudden downpours and flash flooding, or prolonged rainfall to cause thousands of dollars in damage.
Standard insurance policies do not cover damages caused by flooding, but this coverage is available to homeowners, condo owners, renters, and commercial property owners and renters. Considering that more than a quarter of claims come from areas that are deemed low to moderate risk, flood insurance is worth adding to your existing policy for more peace of mind.
The federally-backed National Flood Insurance Program makes flood insurance available through private property and casualty insurance agents. Rates are set nationally, but they take into consideration a number of factors, such as the date and type of construction of your dwelling and its level of risk.
Two types of flood insurance protection are available: building coverage and contents coverage. Building coverage includes the building and its foundation, the electrical and plumbing system, central heating and air systems, built-in appliances, refrigerators and stoves, and permanently installed carpeting. The contents coverage includes possessions, such as clothing, furniture, electronic equipment, portable appliances and window air conditioning units.
Reimbursement for flood claims are commonly dispersed using Replacement Cost Value (RCV), which is the cost to replace the damaged property, or Actual Cash Value (ACV), the RCV at the time of the loss minus physical depreciation.