Flood Insurance Policies
The Pink Elephant
It‘s kind of hard to ignore a big pink elephant, especially if it is, let’s say, occupying your living room. “Yeah, right” you might reply, but think about it. If you own a beautiful waterfront property with breathtaking views of crashing ocean waves, (or if you own something a bit more modest that is simply in close proximity to a large body of water), the risk of flooding is your pink elephant. To help mitigate any damages or monetary losses resulting from flooding, guess what? You should really consider flood insurance.
This kind of insurance policy is in place to cover people (maybe people like you) against the possibility of property loss that results from flooding. This is truly something to seriously consider when one remembers that normal property insurance hardly ever covers flood damage. So, yes it is a separate policy that you will likely need to pay for.
If you are an owner of either a residential or business property that is in close proximity to water, the risk of flooding is too great to ignore. Keep in mind that if you are in the market for a property purchase and it happens to be at risk from flooding and you are using an FHA or other government loan to buy it, you will be mandated to obtain this kind of insurance.
What it Provides?
Should your property sustain some damage from flooding, you put in a claim with the insurer provider who underwrote your coverage (just like other policies). Someone then comes to your location to assess the damage and you eventually obtain compensation for the damages assessed. The costs of repairing flood-damaged structures can be quite significant, therefore these policies can be proverbial life-savers when it comes to mitigating risk.
Kinds of Coverage
There are a few kinds of these insurance policies that cover flood damage. One type is a building only policy, which covers damage to real estate; another kind is a contents only policy. These are designed for renters of properties that might be in flood prone areas. Finally, there are policies that cover both the property and the belongings within. Policies and their premiums vary and are often determined by a property’s perceived level of flood risk.
Why Flood Insurance?
As previously mentioned, most property insurance types do not provide coverage for flood damage. As a result, should a flood strike your property, you can be personally responsible for out-of-pocket costs that are out of this world! Be it structural damage or the losses from belongings that are flood effected, costs can add up alarmingly quickly. To instill peace of mind and to eliminate stress in your life, you would be smart in looking into insuring against flood damage.
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