If you have insured your home, you may think, mistakenly so that your home is covered for flood and hurricane damage. No standard home owners insurance policy will cover flood damage, some standard home owners policies will cover hurricanes, but only in states that do not traditionally experience hurricanes. Standard home owners policies tend to only typically cover damage that comes from the top down, such as damage caused from wind and rain, but it will not cover damage caused by rising water and flooding.
-image credit, http://firewaterstormpros.com
If you want flood coverage, you must go through a National Flood Insurance Program plan. If you live in a high risk area for flooding, your mortgage company may require you to get flood insurance. If you live in the high flood risk area which is also known as the “100-year” or the 1 percent annual chance floodplain, flood insurance is mandatory if the property has a mortgage or loan on it from a federally regulated institution, such as a Basic FHA Insured Home Mortgage. Your community must participate in the National Flood Insurance Program to obtain this insurance, if not you will have to search for an agent or company willing to underwrite a private policy, and these policies are almost always more expensive than a NFIP insurance policy.
The NFIP program will cover up to $250,000 coverage for single family residential homes and up to $100,000 coverage for personal contents. Businesses can obtain up to $500,000 coverage for buildings and up to $500,000 coverage for business contents. The deductible is limited to $1,000 for these insurance policies, and may be as low as $500.00. Policies cost an average of $600 per year for coverage of up to $250,000 for a home and up to $100,000 on its contents, so this insurance is very affordable when considering the risk of losing everything you own to a flood. While flood insurance is from a national government program, NFIP flood insurance is always sold through private insurance companies and the policies are then backed by the federal government. The company you buy your standard home owners insurance company can get you signed up for the NFIP flood insurance policy, or you may also visit www.floodsmart.gov and then choose “Agent Locator” under the “Resources” section to find a list of flood insurance providers in your area.
A standard home owners insurance policy also will not cover sewage backup. You can however get a sewage-backup rider for about $50.00 per year, and will cover from $10,000 to $20,000 of damage. A sewage backup rider will also cover you in the case of sump pump failure. A rider is like a mini-policy that is added onto your original policy.
Due to the low cost of this insurance it is a good idea to get it, especially if your home has a basement. This insurance will cover the cost of a professional company to come and clean the aftermath of a sewage mishap, and it is a dirty messy job, and while you could do it yourself, professional clean up companies eliminate the risk of mold.
If you live in a hurricane or tornado prone area, or even an area that could experience a hurricane, you should be advised that most home owners insurance does not cover hurricane damage. Should you wish to receive insurance against hurricane and tornado damage, you must buy a separate rider for this. You can offset the cost of this insurance by raising the deductible, which will then lower your monthly premium. You can also get discounts if your home has certain features to limit hurricane damage such as shutters. If you do experience hurricane damage contact your insurance right away following any damage to begin the claims process.