http://www.bankrate.com/finance/insurance/flood-insurance-6.aspx – Hurricane damage example http://www.nytimes.com/2012/11/11/realestate/reconsidering-flood-insurance-after-hurrican-sandy.html?pagewanted=all&_r=0 -- 18/25% facts
Biggest Threat Is Not the
Top of the list
Flooding is the nation's top
natural hazard according to the
National Flood Insurance
Program, run by FEMA. Whether
due to hurricanes or other
flooding has caused damage in
50 states over the past five
with damages ranging upwards
$50 billion annually.
Source: Flickr; U.S. Geological Survey
One of the reasons that flooding tops the threat list, over physical
damage from hurricanes or tropical storms, is its ability to spread
further than a storm's footprint.
While a storm surge (water pushed inland by strong winds) has a
huge, direct impact on coastal areas, the same surge can effect
areas much further inland.
Due to rising sea levels, water levels are already elevated, allowing
flooding to spread further than in past years.
A different kind of damage
Not only does flooding from a storm
effect a larger swath of the population
than just coastal areas, but it causes a
substantial amount of damage with
very little water necessary.
Though a home may only be flooded by
a few inches, that water seeps into the
into the pores of the structure,
damaging foundations, walls, electrical
systems, and many other components
of a home.
Source: Flickr; DVIDSHUB
Prepared for the financial storm
Between 2008 and 2012, the average damage claim for a flooded
property was $38,000.
And for those that are not prepared, the financial burden may be just as
challenging as the physical repairs.
Recent storm troubles
Following both Hurricane Katrina in 2005
and Sandy in 2012, many property owners
found that their insurance policies lacked
coverage for flooding.
For those without dedicated flood
insurance coverage, assistance for cost of
repairs and rebuilding fell to Federal
Emergency Management Agency
Unfortunately, FEMA isn’t always the best
resource. Following Hurricane Sandy, 57%
of those who applied for FEMA
assistance were rejected.
Standard insurance isn’t enough
As many Katrina and Sandy victims found out, typical home-owners insurance
policies exclude coverage for flooding, requiring policyholders to supplement
their basic coverage.
Likewise, even separate hurricane policies may have similar restrictions and
requirements in relation to flooding. For example, if hurricane-force winds
destroyed your roof and water flooded your house as a result, you’re covered. If a
nearby river overflowed due to the storm’s downpour, you may not be.
Regardless of the limitations of standard home insurance policies, only 18% of
Americans have dedicated flood insurance despite the fact that 25% of claims
come from low to moderate flood-risk areas.
National Flood Insurance Program
The National Flood Insurance Program provides flood insurance for the
majority of Americans.
Working in partnership with 90 private insurance companies, NFIP offers up
to $350,000 in coverage: $250,000 for physical damage to your home and
$100,000 for your possessions.
In 2013, the average annual cost of a flood insurance policy was $637. So,
for a little over $50 per month, homeowners can have the added peace of
mind that their home is better protected in the event of a flood.
The protection offered by the National Flood Insurance Program’s policies can still leave
some homeowners out in the cold.
NFIP policies do not usually cover basements, other than heating and cooling systems
located there, so anyone with damage to a finished basement would have additional costs
Vacation homes are also a tricky area, with higher premiums and policy limitations that
could increase your expenses.
The policy will only cover the actual cost of repairs and replacement, so relocation costs like
a temporary rental or hotel stay will be out-of-pocket expenses.
And of course, if your home sustains damage above the $250,000 limit, you’ll be
responsible for the difference.
Bigger homes, bigger needs
For homeowners with
bigger needs, supplemental
flood insurance can be
purchased from private
There are some specialists
that can provide coverage
for highly specific insurance
needs, like those with
homes in coastal areas.
Source: Flickr; Ben Salter
Don’t be left stranded
Flooding is the most commonly occurring natural disaster, leaving millions
with huge potential financial expenditures in the wake of this season’s 15
With only two major storms making landfall in the Atlantic region, this
season’s storm count may fall below historical averages, but homeowners
should prepare themselves (and their insurance policies) nonetheless.
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