Hurricane Season is coming – batten down your flood insurance

By Tom Egan

Hurricane Season is coming – batten down your flood insurance

Recent studies report that for Hurricanes Harvey and Irma an estimated 80 percent properties damaged by flood waters were not insured for flood loss and that those able to rebuild were out of their homes for an average of three months. And while hurricane season begins June 1, hurricanes are not the only flood threats.

Heavy downpours from spring rains and snow melt cause inland river flooding. Intense, widespread wildfires burn the underbrush and trees that normally provide natural breaks from runoff. It is no wonder, therefore, that flood is one of the top five perils homeowners face each year. It is not a matter of if, as much as when, it will happen. Worse, flood is normally not part of your homeowner’s policy.

Digging into your own pocket to cover flood damage can be costly. The average claim varies with the type of floodwater, the duration the water remains in the home and its depth, but typically the formula works out to just one inch of water can cost more than $25,000 in damage. Hurricane Harvey dumped more than 50 inches of rainfall into the Houston area and damaged more than 135,000 homes with the resulting flooding.

While the federal government-sponsored national Flood Insurance Program (NFIP) has been offering coverage for this peril that many insurance companies could not handle, it has its own limits. The NFIP is deeply in debt and Congress has yet to approve a reauthorization for the program, approving five short term extensions so far this year to help it limp along. The next funding deadline looms again on July 31, right in the middle of Hurricane Season.

In recent years, as more precise mapping and modelling technology has emerged ,private flood insurance has become a viable and economically smart alternative to the NFIP. The maximum coverage afforded by the NFIP is $250,000 for building and $100,000 for the contents. Statistics show that the “average” home in the US costs over $311,000 to rebuild.

The private flood market can offer full replacement cost as well as range of coverages that the NFIP does not, such as: additional living expenses incurred while you are displaced from your home by flood, coverage for items in your basement, swimming pool equipment, trees and shrubs or loss of rent on rental homes. Lenders accept private flood for their statutory coverage requirements and there is no need to obtain an elevation certificate to purchase the flood insurance through the private market. It is a great time to explore the flood insurance options available.

So, as another hurricane season descends, it’s a great time to assess your needs and explore your available flood insurance options. Connect with your Risk Strategies representative today to learn more.