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Is Primary Flood Insurance Enough? Maybe Not.

What is excess flood insurance and what you need to know about this unique product.

9/22/2016

Most homeowners, renters, and commercial property owners and renters purchase their flood insurance from the government through the National Flood Insurance Program (NFIP).

Differences exist from policy to policy, but typically there are two types of primary flood insurance offered through the federal government’s National Flood Insurance Program (NFIP) – building property and personal property. Building property can cover structural damage including furnaces, water heaters, flood debris cleanup, and floor surfaces up to $250,000. Personal property can cover appliances, clothing, certain valuable items, furniture, and electronics up to $100,000. Primary flood insurance does not ordinarily cover anything in a basement (aside from furnace, water heaters and appliances covered under personal property).

If your home value is more than $250,000, your insurance agent may recommend the purchase of excess flood insurance, and if you have a mortgage, your lender might require you to purchase excess flood insurance in addition to the $250,000 primary flood insurance. Excess flood insurance is offered through the private sector, and can offer coverage of over $1 million. The excess policy should essentially mirror the coverages of your primary policy, with the additional coverage limits that you need.

Think you don’t need flood insurance because the community you live in has never experienced a flood? Not true- in fact, more than 20% of flood insurance claims are from low to moderate risk flood areas. Floods can happen anywhere it rains, and most flood losses are not typically covered under your homeowners policy.

The question is, do you have enough flood insurance?

If you think you may need flood insurance or are not sure you have the right coverage, ask your local independent agent to evaluate your current policy for flood exposure and recommend a plan that will protect your home and valuables from irrecoverable loss.

Need to find a local independent agent? Find one today!

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