Introduction
Flood insurance is the most important kind of insurance, that every property and business owners as well as others should have. It is a kind of insurance that covers a dwelling place for the losses caused by water damage, especially due to flooding. There are many reasons for floods like prolonged rains, snow melting, coastal storms, or dam failure and so on. In several places, a flood considered as a vis major event. And, the damage or destruction which it causes are not covered if you do not get a supplemental insurance. Now, many people want to know what does flood insurance cover? So, continue reading to know more.
Residential & Commercial Properties
One of the main things that you ought to know is that, a flood insurance covers both residential and commercial property. The NFIP, also known as National Flood Insurance Program, provides i.e. offers flood insurance to many residences with policies, which are offered through insurer’s that are private. Besides all of that, the cost of the flood insurance policy is based on the flood zone, chosen by NFIP & where the property is located, its number of floors, age and elevation. People who live in the area, which is prone to floods mostly need to get a special insurance policy. Flood insurance policy works just like any other insurance policy.
What Does the Policy Contain?
If any property or its internal or external structure is damaged by floods, due to the events like storm, snow, rains, or collapsed or failed infrastructure, then the people living in such residences are covered. If you have done a flood insurance, then you will receive cash to repair the loss or damage caused or rebuild the structure, but up to the policy limit. Also, the insurer requires that flood insurance policy holders, buy separate policies to cover the dwelling & its internal or external structures or contents. Also, a separate rider is required to cover the backup of sewer, if it has not caused due to the flood waters.
A Zone Properties
The NFIP or FEMA also designates the properties zone wise. If the properties are located in zone A, then they are at high risk of the flood. So, it is kind of compulsory for the people residing there to have a flood insurance policy & supplemental insurance policy. And, properties that are designated as V are also, the same as that of A. They are high-risk areas located along the coast. Some home owners have a D designation, which means their area is yet to be determined as a flood zone or prone area.
Cost Factors of Flood Insurance
Here are some of the important cost factors of the flood insurance and they are – the number one is the location of the property. Next is, age of the property, then, comes the flood zone designation, like Zone A, Zone V or Zone D. Apart from that, the other two factors are type & size of the structure, and the number of floors in the property. These all factors are considered by the insurer company, prior to issuing a flood insurance.
