Flood Damage Notes
Little known facts about flood insurance Generally speaking, if you don’t live in a flood zone, you may know little about flood insurance. However, because of its relatively low cost and attendant peace of mind, flood insurance may still be a valuable addition to your insurance program. Here's why:
- Anyone can be a flood victim. You don't have to live near water to be flooded. Storms, melting snow, hurricanes, backup due to inadequate or overloaded drainage systems, and dam or levee failure can all cause floods.
- Other policies do not cover flood damage. The only way you can protect your business location and belongings from flood damage is with a policy from the National Flood Insurance Program (NFIP). Coverage for nonresidential property is available for up to $500,000 for the building and $500,000 for contents.
- Flood insurance is available everywhere. It doesn't matter whether your flood risk is high, medium, or low, insurance is available as long as your community participates in the NFIP program.
- Low-cost policies are available for low to moderate risk. According to the Federal Emergency Management Agency (FEMA), a preferred risk policy costs a little over $100. The average policy in a designated area costs a little more than $300 a year for about $100,000 of property coverage. In contrast, a disaster loan for $50,000 can cost you more than $300 a month for 20 years.
- Contents coverage is separate. Coverage on the building itself is separate from contents inside the building. Therefore, property owners should note that contents coverage is not automatically included and should be requested in addition to coverage for the building. This also means that renters can insure their belongings, though renter's maximum available coverage may be less than what is available for owners.
- There is a customary 30-day waiting period. Plan ahead so you’re not caught without flood insurance when you need it. That's because there is typically a 30-day waiting period before coverage actually goes into effect.
- Remember, federal disaster assistance is only available if the president declares a disaster, which occurs in less than 10 percent of all disasters. However, a flood insurance policy will pay whether or not a disaster is declared.
Water Backup of Sewers or Drains
The Water Backup of Sewers or Drains Endorsement provides coverage for direct loss caused by water which backs up through sewers or drains and which is not caused by the negligence of an insured.
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