Is Your Home Adequately Protected in the Event of a Flood?
As a Florida resident, you understand well the value of maintaining a flood insurance policy for your home. You are aware that contrary to popular belief, any and all damage from “rising waters”-even if such damage should occur either simultaneously with or as a result of a windstorm and/or named hurricane-is not covered unless you maintain a separate flood insurance policy. The National Flood Insurance Program (“NFIP”) offers flood insurance coverage nationwide to over 20,500 communities who have joined the Program.
Note that if you maintain a mortgage on your home and your home is located in a flood zone, you will be required by your mortgage company to purchase a separate flood insurance policy. However, even if you own your home and remain mortgagee-free, it is always a wise choice to continue your flood insurance coverage. With an average policy rate of only $500 per year, flood insurance proves most affordable in today’s world.
At Toxey Whitaker Insurance, we specialize in flood insurance policies. Our expert agents will get you covered appropriately and efficiently, and always at the best possible rate. But don’t delay! Thirty (30) day wait periods are sometimes applicable (i.e., a lapse in flood coverage since purchasing the home), so contact us today at 386-427-5261. Don’t get caught in the storm without it! Be sure and protect your home and possessions before hurricane season!
Nationwide, only 20% of American homes at risk for floods are covered by flood insurance.
Private insurers are unable to insure against the peril of flood due to the prevalence of adverse selection, which is the purchase of insurance by persons most affected by the specific peril of flood. In traditional insurance, insurers use the economic law of large numbers to charge a relatively small fee to large numbers of people in order to pay the claims of the small numbers of claimants who have suffered a loss. Unfortunately, in flood insurance, the numbers of claimants is larger than the available number of persons interested in protecting their property from the peril, which means that insurers are unable to cover their costs in flood insurance.
In certain flood-prone areas, the Federal Government requires flood insurance to secure mortgage loans backed by federal agencies such as the FHA and VA. However, the program has never worked as insurance, because of adverse selection. It has never priced people out of living in very risky areas by charging an appropriate premium, instead, too few places are included in the must-insure category, and premiums are artificially low.” The lack of flood insurance can be detrimental to many homeowners who may discover only after the damage has been done that their standard insurance policies do not cover flooding.
As a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or two or more properties (at least one of which is your property) from: Overflow of inland waters, unusual and rapid accumulation or runoff of surface waters from ANY SOURCE, and mudflows.
This can be brought on by landslides, a hurricane, earthquakes, or other natural disasters that influence flooding, but while a homeowner may, for example, have earthquake coverage, that coverage may not cover floods as a result of earthquakes.
Insurers in the US do not provide flood insurance coverage due to the hazard of flood typically being confined to a few areas. As a result, it is an unacceptable risk due to the inability to spread the risk on a wide enough population to absorb the potential catastrophic nature of the hazard. In response to this, the federal government created the National Flood Insurance Program in 1968.
The National Association of Insurance Commissioners (NAIC) found that 33 percent of U.S. heads of household still hold the false belief that flood damage is covered by a standard homeowners policy. FEMA states approximately 50% of low flood zone risk borrowers think they are ineligible and cannot buy flood insurance. Anyone can buy flood insurance as long as their community participates in the NFIP, even renters. However, unless one lives in a designated floodplain and is required under the terms of a mortgage to purchase flood insurance, flood insurance does not go into effect until 30 days after the policy is first purchased.
If you are eligible, you must purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program (NFIP). Flood insurance is available for residents of approximately 19,000 communities nationwide.