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It was in 1968 that the United States Congress initiated the National Flood Insurance Program so that resulting damage to private and business property would be reduced. Available through insurance companies and insurance companies, coverage is governed and dictated by government laws and can protect the property owner from damage caused by flooding.
A Basic Insurance for a home is intended to cover a one-, two-, three- or four-family home, as well as a single-family home.
A general flood policy can insure five or more family homes, as well as non-residential buildings.
You can insure a housing association with an Association for Housing Associations.
This type of policy should include two types of related coverage: real estate and personal property, defined as the contents of your premises.
Three essential things about a related insurance policy
• Contents cover must be purchased independently of the building cover.
• Flood insurance is not a rated cover, which means it will only cover actual damage up to the limit of the policy.
• Flood insurance has no guaranteed replacement cost coverage that is not subject to limits. Flood insurance only pays for damage up to the policy limit.
More things to understand
It is important to note that the government-administered program gives special consideration when multiple flood claims are filed by the same policyholder. Officially considered “severe repetitive loss,” where action may be warranted to prevent future losses, these claims may result in an offer of a FEMA mitigation grant, if appropriate.
Acceptance of the grant is voluntary, but any policyholder who declines the opportunity for publicly funded improvements designed to reduce the likelihood of flood damage to property may be tied down with a rate increase equal to one hundred and fifty percent of the rate charged for real estate when the grant was offered.
Policyholders with severe repeated property loss may be eligible for the subsidy if the following conditions are met:
• 4 or more different insurance claim benefits (including building/contents payments) have been issued and each is more than $5,000
Or
• At least 2 different flood insurance policies for building damage have been paid out that together are more than the current value of the property
For more information on flood insurance and how a respective policy can be tailored to your individual needs, please contact an experienced independent agency.
What you need to know about flood insurance
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