Flooding is the nation’s most common natural disaster, which causes billions of dollars in damage each year. Just one inch of water can cause $25,000 in damages to your home. Flooding can result from natural disasters such as hurricanes, excessive rain, or events such as excessive snow melt and rising water levels in rivers and lakes due to ice dams or snow melt. Wisconsin was hit hard by flooding as a result of excessive snow melt in early Spring 2019, and many residents contacted our firm to address potential recovery under their insurance policies.
Unfortunately, the fact is, regardless of whether the flooding at your home or business is a result of a natural occurrence, most homeowner’s and business insurance policies do NOT provide coverage for flooding. Additionally, sewer backup or sump pump overflow is not covered by a standard homeowner’s insurance policy or by flood insurance. This type of coverage must be purchased with a special endorsement on your homeowner’s policy.
Those who live in areas that are at high risk for flooding, based upon government flood zone maps, may be required to obtain flood insurance as a condition of receiving a mortgage from a federally regulated or insured lender. Even if federal law does not require it, a lender may still require that you possess flood insurance. If you live in a high risk area, you may be able to purchase a policy through the National Flood Insurance Program (NFIP) through the Federal Emergency Management Agency (FEMA).
If you live in a low risk flood zone or in areas that typically have a low risk for flooding, flood insurance is not federally required. However, flood insurance may still be worth considering, because over 20% of flood insurance claims come from outside the high risk areas. You will need to check with your insurance agent whether it is possible to purchase flood insurance through a private insurance company or if your community participates in the National Flood Insurance Program where flood insurance policies should be available for purchase. Based upon the web site www.fema.gov, both Stevens Point and the Village of Plover, the area in Wisconsin our firm is located, are communities which participate in the National Flood Insurance Program.
How much flood insurance coverage is typically available through a flood insurance policy? In a one to four family residence, there is typically $250,000 in coverage for the structure itself and $100,000 for the contents. For a business, there is typically $500,000 for the structure and $500,000 for the contents.
There is typically a 30-day waiting period from the date you purchase the flood insurance policy before your policy goes into effect. Therefore, you cannot afford to wait until an imminent threat of flooding before you purchase flood insurance to protect yourself. Additionally, if you have flood insurance, make sure that you do not let your policy lapse, as that will cause you to lose coverage and you may not be in compliance with the terms of your Mortgage Agreement if your lender requires flood insurance.
For more information on which private companies sell flood insurance and to learn additional information on other questions you may have about the National Flood Insurance Program, please check out the following website: www.floodsmart.gov. Another resource you may wish to consult is the Wisconsin Office of the Commissioner of Insurance: www.oci.wi.gov. These are valuable resources that can lead you into the right direction as you consider protecting your home or business from flooding in the future.