02 Jul Flood Insurance Policy Basics | AWS Insurance | New Orleans
Summertime is a reminder that hurricane season is here, and with it come flooding and the fear of losing valuables. Luckily, flood insurance policies help homeowners protect their assets at an affordable price. Whether this is your first time buying home insurance or you’ve been covered for a while, you’ve come to the right place. Below you will find helpful information on different kinds of flood insurance and what they cover. Remember that your homeowner’s insurance does not cover flood protection, so it is always advisable to have a flood preparedness plan and a flood insurance policy.
Types of Flood Insurance Coverage
Flood insurance is divided into two categories: commercial and residential. Each has its own unique characteristics and covers different assets in different ways. Here’s a brief summary of each type and their policy basics:
Commercial Flood Insurance Policy
According to the National Flood Insurance Program (NFIP), 25% of businesses that close down during a flooding never bounce back. This is an alarming figure as it represents a fourth of companies affected. If your business is not covered, now is a good time to protect yourself against future financial losses. As with any other insurance, your rate will be determined by the amount of coverage you buy and the things you want insured. As a business owner, you can purchase insurance that protects both your building and whatever is inside of it, such as equipment you use daily to run your company.
A commercial flood insurance policy is risk-based, which means the physical location of your business determines how much you pay. Moderate-to-low risk areas generally get the lowest premiums, as the NFIP has deemed that area less prone to damages by flooding. A commercial flood policy can cover your building or its contents only if you prefer. If your commercial property is in a high-risk area, your premium is more likely to be higher than other businesses. Other factors that determine your commercial flood insurance premium are the location of your contents, building occupancy and the age of the building.
Residential Flood Insurance Policy
Most homeowners don’t realize that a few inches of water can cause a great deal of damage. The FNIP reports that the average residential flood claim was more than $38,000. Fortunately, residential flood insurance is offered to homeowners, renters and condo owners/renters, hence owning a home is not a requirement. Just like their commercial counterparts, residential flood policies are risk-based and typically require a 30-day waiting period before it can take effect.
Homeowners flood insurance typically covers damage to the house itself and the contents inside of it. Remember you can qualify for a preferred policy pricing if you live in low-to-moderate risk areas. If you are a tenant, protecting your valuables from a flood is a wise investment that won’t break your bank. Your rate will be calculated based on factors such as the value of your contents, the age of the building you occupy and the flood risk zone.
What Does Flood Insurance Cover?
We’re glad you asked. By now you should know your regular renters or homeowners insurance does not cover flooding. Flood insurance policies cover two main aspects of your property: the building and its contents.
Building insurance covers everything from its foundation, plumbing and electrical systems and central air conditioning. Surprisingly, building property insurance also includes refrigerators, dishwashers and stoves, and any permanently installed carpeting, paneling, wallboards, and cabinets. Unfortunately, detached garages require an additional building policy.
Personal contents covered by your policy include clothing, furniture, electronic equipment and other personal belongings. You can also add valuable items such as paintings or furs, with a value of up to $2,500. In addition, non-attached appliances like washers, dryers and microwave ovens fall under this category.
Remember is easy to choose your flood insurance policy. Consult with flood experts in your area, which know better about the areas that are highly affected by hurricanes and flooding.
AWS Insurance serves New Orleans, Metairie, Kenner, and Southern Louisiana by providing protection for your home, business, or family with affordable plans in property insurance, liability insurance, life insurance, car insurance, and flood insurance from our Metairie, LA office. Our corporate clients can rest assured that our dedicated advisers at AWS Risk Management, LLC will help you implement workable solutions that achieve maximum asset protection with minimal cost of risk to your company.