The Federal Flood Insurance Program was established in 1968 by the US Congress to mitigate the effects of flooding on individual and commercial property. The coverage is administered and mandated by government legislation, and it is provided by insurance companies & insurance agencies to safeguard property owners against flood damage.
A single-family house, a duplex, a triplex, or a quadplex all qualify for coverage under an average insurance policy for dwellings.
Buildings with five units or more, as well as commercial and industrial structures, are covered by general insurance flood coverage.
A building that is part of a residential condo community may get insurance via their own policy.
Coverage for both the structure itself and the contents of the building, or “personal property,” should be included in a policy of this kind.
There are three facets of an insurance policy that are crucial.
Insurance for floods is not a kind of valued coverage; it pays only for actual damage up beyond the policy’s maximum; and contents coverage must be obtained separately from the structure coverage.
There is no unlimited, guaranteed cost of substitution coverage with flood insurance. Damages exceeding the policy maximum are not covered by flood insurance.
There Is Even More to Take in
It’s worth noting that policyholders who make several flood claims within a short period of time will get preferential treatment from the government-run scheme. Claims that meet the criteria for a “severe repetitive loss,” in which action may be necessary to avoid further losses, may be considered for a FEMA mitigation award.
Policyholders who choose not to accept the government-funded improvements aimed at reducing the likelihood that their property will suffer flood damage may be hit with a rate increase of up to 150 percent of the rate they were charged for property before the grant was offered.
If the following criteria are met, policyholders suffering severely repeating property losses will be awarded the grant.
Insurance companies have paid out more than $5,000 over at least four separate claims (including building and contents payments).
Or
Two or more separate claims settlements from flood insurance have been awarded that exceed the current market worth of the structure.
Contact a reputable independent firm to learn more about flood coverage and how a policy can be customized to fit your requirements.