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Top 10 Flood
Insurance Questions
Here are the 10 most frequently
asked questions about the National Flood Insurance Program (NFIP)
10.
Can't I just wait until it starts raining to buy Flood Insurance coverage?
Not if you want to be covered. Under most circumstances you've got to wait 30
days from the time the premium and application are received to be covered. So
you can buy the coverage when it starts raining, but it won't protect you
until 30 days later. The only way to circumvent the 30-day waiting period is
if your community has revised its flood map within the last year or this is
your first purchase and it is required by a lending institution to close a
loan.
9.
Aren't the NFIP limits too low to matter?
Not anymore. The 1994 improvements to the National Flood Insurance Program
bumped up the limits on single family residences to $250,000 for the structure
and $100,000 for the structure's contents. Even commercial structures can be
insured to a limit of $500,000 for the building and $500,000 for contents.
Replacement cost coverage is available for structures on a limited basis for
single-family dwellings that are primary residences.
8.
I can't qualify for coverage because I'm not in the flood plain, right?
Wrong. Almost everyone in a participating community qualifies for coverage and
almost every community participates in the program. Remember to set the policy
limits to the full value of your structure and buy contents coverage too.
7.
Isn't it too tough to sign up and not worth my time since I'm in a low to
moderate risk area?
Today it is even easier for people in zones coded B, C, and X to secure
coverage. And more than 25% of all NFIP flood claims come from these low to
moderate risk areas.
6.
Can I finance my purchase?
Sure, most insurers accept all major credit cards.
5.
Do I have to wait until a completed elevation certificate is issued to me?
No. With provisional rating, many insurers can make coverage available even
before an elevation certificate is complete (required on homes built after
December 31, 1974 in map zones coded A or V). So you won't need to delay
closing on a loan or settlement of a property.
4.
Is my basement covered?
NFIP policies have some coverage for basement elements: cleanup expense and
items such as furnaces, water heaters, washers and dryers, air conditioners,
freezers, utility connections, and pumps are included. Contents in a finished
basement are excluded, as are a basement's finished walls, floors, and
ceilings.
3.
Can't I just wait for federal disaster assistance?
Hardly. Federal disaster assistance is declared in less than half of all
flooding incidents. Besides, the annual premium for a NFIP policy is less
expensive than the interest on most federal disaster loans. The only real
option is to get insured before the loss. Even if a federal grant or loan is
awarded to you after a major flood, you'll probably be required to use part of
the proceeds to purchase a NFIP policy.
2.
Where can I buy NFIP coverage in my area?
If you currently have a homeowners or renters policy talk to your agent.
Otherwise contact the NFIP directly to reach an insurer in your area.
1.
Doesn't my homeowners policy cover floods?
NO. Most major insurance companies do not offer flood protection as part of
their homeowners coverage. Catastrophic risks created by floods are just too
costly and would raise homeowners premiums too high. The NFIP is the only way
for homeowners to address the risk of flood.
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