Flood insurance indemnifies for the loss of property that occurs due to overflowing water bodies or flood. Flood insurance is specifically needed for properties situated in flood prone areas. A flood insurance policy has to be taken separately because most policies do not cover the natural disaster of flooding. The protection offered by most policies covers losses incurred due to some failure at the home itself.
What are the types of coverage available under a Flood Insurance policy?
A flood insurance policy covers the loss of value of the physical building. Coverage of personal belongings is based on the policy one opts for. Therefore, before deciding on which policy to buy, one needs to make sure that all personal belongings are protected by some policy. The following are the two types of coverage available under flood insurance:
Building Property Coverage: This type of policy covers the insured building, electrical and plumbing systems, furnaces, water heaters, centralized air conditioning system, cooking stoves, refrigerators, built-in appliances, window blinds and debris removal. This coverage indemnifies against permanently installed cabinets, paneling, bookcases, wallboard and carpeting. Garages outside the building can be covered for up to 10% of the building property coverage, while a separate policy is required to cover structures outside the building other than garages, such as gazebos.
Personal Property Coverage: This type of coverage compensates against the loss of personal belongings, such as furniture, electronic equipment and clothing. It also covers curtains, air conditioners (both window and portable), clothes washers and dryers, portable microwave ovens and dishwashers, food freezers, including stored food, and carpets that were included in the building coverage. Furs, original artwork and other such valuable items can also be covered.
What are the exclusions under Flood Insurance coverage?
Both building property coverage and personal property coverage do not cover cash, jewelry and valuable certificates.
Damage arising from mold, mildew and moisture are not covered, since these are considered to be factors under the control of the policyholder.
Temporary housing and other living expenses, cars and other self-propelled vehicles (including their parts) and the loss caused to business due to interruption are also excluded.
Any property such as decks, fences, patios, hot tubs, seawalls, swimming pools, wells, plants, trees and septic systems located outside the building are also not covered.
Why should one get Flood Insurance?
Most people are unaware that compared to fire losses, the occurrence of damage from floods is 30 times more likely, especially if the location of the house is in a flood zone. One should always be equipped to face any unforeseen disaster.