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Does my homeowners insurance cover flooding?
Standard homeowners
policies do NOT cover flooding. You can purchase flood coverage
directly through your homeowners insurance agent. However, the policy
is provided by the Federal Flood Insurance Program ( 888-379-9531, http://www.floodsmart.gov
).
Replacement cost coverage is
available for the structure of your home, but only actual cash value
coverage is available for your possessions. Replacement cost coverage
pays to rebuild your home as it was before the damage. Actual cash
value is replacement cost coverage minus depreciation so that the older
your possessions are, the less you will get if they are damaged. There
may also be limits on coverage for furniture and other belongings
stored in your basement.
Flood insurance is available for renters as well as homeowners. You
will need flood insurance if you live in a designated flood zone. But
flooding can also occur in inland areas and away from major rivers.
Consider buying a flood insurance policy if your house could be flooded
by melting snow, an overflowing creek or pond or water running down a
steep hill. Don’t wait for a flood season warning on the evening news
to buy a policy—there is a 30-day waiting period before the coverage
takes effect.
The federal flood insurance program provides only limited coverage. If
you need more coverage than the federal program provides, additional
coverage known as “excess” flood insurance is available from
specialized insurance companies. Depending on the amount of coverage
purchased, an excess flood insurance policy will cover damage above the
limits of the federal program on the same basis as the federal
program—replacement cost for the structure and actual cash value for
the contents.
Excess flood insurance is available in all parts of the country—in high
risk flood zones along the coast and close to major rivers as well as
in areas of lower risk—wherever the federal program is available. It
can be purchased from specialized companies such as Lexington Insurance
Company, part of American International Insurance Company, and Lloyd’s
through independent insurance agents, or from regular homeowners
insurance companies that have arrangements with a specialized insurer
to provide coverage to their policyholders. |
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