What Does Flood Insurance Cover?

Flood insurance has an interesting history. Traditional insurance companies gave up on private flood insurance after America’s first billion-dollar hurricane Betsy in 1965. As a result, three years later the federal government started NFIP – National Flood Insurance Program to try and fill the void left by the withdrawal of private flood companies. Over the past 20 years so many homes have been in high-risk flood areas that it has caused NFIP to go broke and need to be heavily subsidized by taxpayer dollars, the insurance premiums are no longer enough to cover all the claims.

The good news is that the current financial condition of the NFIP has allowed private flood insurance to enter the market and it’s now accepted by Fannie Mae and Freddy Mac federally backed home mortgages.

NFIP is responsible for many of the definitions that we use today to define a flood and the coverage limits. It’s important to understand what is and is not covered by a flood insurance policy.

At Anderson Insurance Group, we represent the NFIP flood program and three different private flood insurance companies who all use NFIP’s definition of a flood:

a. A general and temporary condition of partial or complete
inundation of two or more acres of normally dry land area or
of two or more neighboring propertes (at least one of which is
your property) from:
(1) Overflow of inland or tidal waters;
(2) Unusual and rapid accumulation or runoff of surface waters
from any source; or
(3) “Mudflow”;

The two most important things to know about flood insurance are:

  1. A flood is two or more adjoining properties or two acres must be have a partial or complete inundation of water.
  2. Household contents in a basement are not covered. Mechanical systems that are attached to the basement such as a furnace or water heater are covered.

A flood insurance policy may also include a waiting period of 30 days before coverage goes into effect. Palomar Specialty, the preferred flood insurance company used at Anderson Insurance Group does not have a waiting period.

What’s the cost of flood insurance? It depends on many factors including the flood zone your home may be located in and the coverage amount. Private flood insurance in Utah can be as inexpensive as $300.00 per year and as much as $1000.00 or more if your home is in a riskier flood zone.

Call or click for more details and for the cost of flood insurance for your Utah property.

Anderson Insurance Group – Salt Lake City Utah

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