Floods and flash floods occur in all 50 states. Spring storms have already begun and the Atlantic hurricane season begins June 1. Now is the time for consumers to consider their need for flood insurance. According to the Federal Emergency Management Agency (FEMA), roughly 25 percent of all claims paid by the National Flood Insurance Program (NFIP) are for polices in low-to-moderate-risk communities.
Flood insurance is mandatory for anyone in an area designated as a Special Flood Hazard Area (SFHA). However, owners of property outside of these zones should still consider flood insurance.
Hurricane Katrina demonstrated that catastrophic flooding could occur if there is a failure or breach of a protective levee, dam or other physical structure built to hold back their risk of flooding. In some areas, just a short cloudburst can cause flooding.
"Flooding may be small and localized or major and catastrophic," says Allstate Agent Ted Paris. "It is a misconception that flooding only occurs as a result of hurricanes. Flooding occurs throughout the United States as a result of thunderstorms and sudden thaw as well."
Don't get soaked
Consumers should be aware that most homeowners, commercial and renters insurance policies do not cover flood damage. Homeowners may need separate flood insurance coverage to protect against losses from floods during hurricanes, thunderstorms or any time of the year.
In general, a policy does not take effect until 30 days after you purchase flood insurance.
So, if the weather forecast announces a flood alert for any area and you go to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood.
Homeowners can request flood insurance through their local Allstate agent. The federal government's National Flood Insurance Program NFIP) provides flood insurance nationally, and claims are paid by the NFIP. Policies are sold and managed by insurance companies like Allstate through the NFIP Write Your Own (WYO) program.
Nearly 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes federally backed flood insurance available to homeowners, renters and business owners in these communities.
According to FEMA, the average premium for an NFIP flood insurance policy is $400 per year for approximately $100,000 worth of building coverage.
The maximum coverage amounts are $250,000 for a single-family home and $100,000 for its contents. For those homes in lower risk areas with no history of flooding, a preferred-risk policy may be purchased for $233 (no basement) or $263 (with basement) for $100,000 worth of coverage for building and $40,000 for contents.
A costly tab
If flooding impacts a consumer and they do not have flood insurance, the cost to rebuild their lives could be in the tens of thousands of dollars. Homeowners need to ask themselves if they could afford that expense without flood insurance.
"Purchased separately from your homeowners, condominium, renters or commercial policies, a flood policy can help complete the insurance protection for your property," Paris said.
The Allstate Corporation (NYSE:ALL) is the nation's largest publicly held personal lines insurer. Widely known through the "You're In Good Hands With Allstate" slogan, Allstate helps individuals in approximately 17 million households protect what they have today and better prepare for tomorrow through approximately 14,100 exclusive agencies and financial professionals in the U.S. and Canada. Customers can access Allstate products and services such as auto insurance and homeowners insurance through Allstate agencies, or in select states at allstate.com and 1-800 Allstate.
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