The Myths About Flood Insurance

THE MYTHS ABOUT FLOOD INSURANCE

In my experience as an insurance agent, consumers are unaware of the facts about Flood Insurance.In this article, I hope to clarify some of those misconceptions.What do you know about Flood Insurance?

1. A standard homeowners policy covers flood.

False. A standard homeowners policy never covers flooding.Only a flood insurance policy covers flooding.

2. A Flood Policy is always written at replacement cost of the dwelling or the building.

False. A flood policy is written at Actual Cash Value in most cases.The policy is generally initiated by the mortgage company because the dwelling is in a flood zone.The maximum dwelling value insured on a Flood Policy is $250,000.If you have a home worth $350,000, the policy will only cover $250,000.

3.Contents coverage is always included in the Flood Policy.

False. Contents coverage has to be added to the policy and it is at a dollar amount, not replacement cost.

4. There is only one insurer who underwrites Flood Policies.

True.The federal government underwrites all flood policies and agents who have completed the flood education course, may sell the product through the insurance companies with which they are appointed.The rates are the same wherever you go, the difference is the level of coverage.

5. If I have my basement flood, and I have a flood policy it is automatically covered.

False.At least three adjacent properties have to have flooding as well for the loss to be covered.

6.I can pay for the Flood Policy on a monthly payment.

False.Flood Insurance has to be paid in full at the time of purchase in order for it to be in force.You may escrow the policy, and have the mortgage company write the check, but to start the policy it must be paid in full.

7.In order to get the best rating on your policy, an elevation certificate must be obtained.

True.The elevation certificate may be filed with your community if it has been in a flood zone for a number of years, however if you are newly declared a flood zone you must obtain this certificate on your own.You must hire a land surveyor or an engineer, who provides this service and have it done.

The average insurance consumer is not aware of this information.The Army Corps of Engineers determines flood zones and they are constantly changing.Be aware before you purchase a home because this could incur a cost you were not planning.If you do not have a bank mortgage on a property, you may never know you are in a flood zone until you go to sell the home or refinance.Do your homework so you can be prepared.

Alice Kramer is a licensed insurance agent with Mark Matthews and Associates in Pickerington, Ohio.Alice specializes in property and casualty insurance. Mark Matthews and Associates is a full service independent insurance agency, striving to provide excellent customer service.If you have questions, or want to learn more, please contact Alice at alicek@mma4.net, or visit out web site at www.mma4.net.