Additional Policies

If you live in a flood-prone area, flood insurance can cover flood or mudslide damage to your property. Federal law prohibits mortgage lenders from offering loans on homes located in a designated flood zone unless the consumer can show proof that they have secured the appropriate limit of flood coverage provided through the National Flood Insurance Program (NFIP).

According to the American Red Cross, flooding and associated debris flow causes as much as 90 percent of damage related to natural disasters (not including droughts)1. In general, floods can occur anywhere and are four times more likely to occur than fires, according to the insurance-rating and information agency A.M. Best Company, Inc. While A.M. Best notes that people living in high-hazard flood areas have a 26 percent chance of experiencing a flood over any 30-year period, 35 percent of flood claims each year are paid on property outside those zones.

Flood insurance typically covers damage to a building — including support systems and foundation. It can also cover direct physical losses and damage caused by floods, including mudslides.

Coverage may vary depending on the contents of a home. In addition, exclusions and limitations may also apply.

The Facts

Taken from: National Flood Insurance Program2

1. Floods and flash floods happen in all 50 states.
2. Hurricanes, winter storms and snow melt are common (but often over looked) causes of flooding.
3. Basic homeowners insurance usually does not cover flood damage.
4. Federal disaster assistance offers loans to help cover flood damage, not to compensate you for losses. Even then, those loans are only available if the President formally declares a disaster.
5. Less than 10% of all weather-related emergencies in the United States are declared federal disaster areas.

There are generally three policy types available:

1. Home – for single- and multi-family homes.
2. General Property – for apartments and businesses.
3. Residential Condominium Building Association Policy – for condos.

Coverage may vary depending on the contents of a home; exclusions and limitations may apply to most policies.

Protect Yourself from Flood Damage

1. It takes 30 days after purchase for a flood policy to take effect, so make sure you’re covered before flood waters start to rise.
2. If your washer and dryer are in the basement, elevate them on bricks or pressure-treated lumber at least 12 inches above the projected flood elevation.
3. Place your furnace and water heater on bricks or concrete at least 12 inches above the projected flood elevation.
4. Buy and install a sump pump with back-up power.
5. For floor drains, toilets and other sewer connections, install interior or exterior back flow valves or float plugs to prevent flood waters from entering. 

1 (2004). Preparation Urged for Potential Spring Flooding. Retrieved June 15, 2007, from the American Red Cross. Web site: http://www.redcross.org/article/0,1072,0_157_2350,00.html

2 (2007). Flood Smart . Retrieved June 15, 2007, from FEMA. Web site: http://www.floodsmart.gov

Do you often entertain guests in your home? Do you have a swimming pool or children who have friends over to play? Concerned about protecting your assets in the event that you (or a member of your household) accidentally injure another person or damage someone else’s property? If you answered “yes” to even one of these questions, you may want to consider a personal umbrella liability insurance policy.

What is an Umbrella Policy?

Umbrella Coverage is designed to provide added liability protection above and beyond the limits of your primary Auto and Homeowners policies. This extra layer of protection is for anyone who has assets that might be at risk if they are found liable for a loss. You can purchase umbrella liability coverage for amounts of up to $5 million.
An example of how a $1 million umbrella policy may work is described as follows:

If you are sued by someone injured at your home for covered damages exceeding your primary Homeowners policy, your Homeowners policy pays liability up to the policy limit. An umbrella policy provides liability insurance for covered damages after the liability amount on your primary policy is exhausted.

Umbrella policies cover liability losses that you, your dependents or even your pets may cause. If your current liability coverage is not adequate to resolve a claim or a lawsuit, the person filing the action against you might go after your home or other assets to collect for damages.