10 Flood Insurance Facts Your Association Members Should Know

In the U.S., flood damage tends to be the costliest, resulting in an estimated $25,000 in damages from just one inch of water, and according to the Insurance Information Institute, 90% of all disasters involve flooding. With hurricane season on the horizon, homeowners and renters need to purchase a National Flood Insurance Program (NFIP) policy by May 1 to prepare for incoming disaster.

If your community participates in NFIP, your members have access to affordable flood insurance protection that insures homeowners for a single-family home for up to $250,000 and its contents up to $100,000; renters for up to $100,000; and non-residential property owners can insure a building up to $500,000 and contents up to $500,000. But even with this coverage, many homeowners, business owners and apartment renters have a collection of false assumptions when it comes to flood insurance. Associated Benefits Consulting is here to clear the air and help your members get covered for flood loss and preserve their properties from the perils of flooding.

Here are 10 facts your members should know about securing flood insurance this hurricane season.

  1. Floods can occur almost anywhere resulting from coastal and inland flooding due to hurricanes, extreme rainfall, snowmelt, and mudflows.
  2. Renters, businesses, and homeowners all benefit from flood insurance to protect their belongings when a flood hits, but most standard homeowner, rental and business owner policies exclude flood damage.
  3. Most homeowners are provided information on flood insurance at the time of purchase.
  4. Homeowners with federally backed mortgages in flood prone areas are required to purchase flood insurance.
  5. Unlike homeowners, renters are not provided information regarding flood insurance and are often unaware that they need a separate policy to cover damage caused by flood.
  6. Damage from flooding generated by hurricane-generated storm surge, snow melt, and extreme rainfall is typically not covered under a standard commercial policy, including a Commercial Package Policy (CPP) or a Business Owners Policy (BOP).
  7. The NFIP makes federally backed flood insurance available to all residents and business owners of participating communities.
  8. On average, 25 to 30 percent of all flood claims paid by NFIP are for properties outside high-risk flood areas.
  9. NFIP Flood Policies have a 30-day waiting period, meaning 30 days must pass before the flood policies become active.
  10. Standard flood insurance by the NFIP generally covers physical damages directly caused by flooding within the limits of the coverage purchased.

At Associated Benefits Consulting, our expert team is ready to help your association find policies fit for all your members. Visit abenefitsconsulting.com for more information about the NFIP, or consult fema.gov for a list of flood policies with abbreviated waiting periods.