With the hurricane season fast approaching, it's time to check your insurance to determine if you're covered on all fronts. Standard homeowner insurance does not cover flood damage, which means policyholders must obtain extra flood insurance to protect their home from potential storm surges. While most policyholders obtain flood insurance through the National Flood Insurance Program, there are private insurer options available to those looking for another option.
We have created a handbook for flood claims that describes important steps that policyholders should take both before and after a flood occurs. . This guide provides not only the best practices for setting yourself up for a successful claim, but also general expectations of how the process will go when the loss occurs and a claim has been filed.
2020's hurricane season for record setting brought significant floods along with It. The policyholders not only had to deal with the effects of wind and wind-driven rain, but they also had to face storm surges and subsequent water damage that flowed into vulnerable homes. With billions in damages across the country, policyholders should treat 2020 as a warning story. Addressing cover gaps should be a top priority during the 2021
According to the Triple-I Consumer Survey 2020, approximately 27% of homeowners policyholders also had supplementary flood insurance. The figure should be higher given the losses experienced in the storms last year. Although flood insurance is an extra premium and can be costly depending on the area you live in, the coverage will be worth it if you encounter floodwaters after a storm.
An interesting aspect to consider with the NFIP policy is that new prices will enter into force in October 2021. FEMA launched a new program to provide more actuarially sound rates that are better suited to specific levels of flood risk. These new premiums take into account the value of a property, the risk of flooding and other factors rather than relying solely on the height level of a property. FEMA has stated that more than 1 million insurances should see an interest rate cut, while only 200,000 insurances are facing a significant increase.
Although the changes in the NFIP interest rate remain to be seen, one thing is certain – flood insurance is a crucial component in ensuring adequate coverage.