If you’re thinking about buying flood insurance, you may want to know a few things before you jump in. Flood insurance is available for commercial, home and property coverage. There are 3 components to each policy:
* Building coverage pays to repair or replace the insured building and its foundation, electrical and plumbing systems, central air conditioning, furnaces and water heaters, refrigerators, stove and most other permanently installed items.
* Contents coverage provides payment for the contents of your home or building, such as clothing, furniture, electronic equipment, portable appliances, and larger removable items like washers and dryers.
* Replacement cost is a valuation method for establishing the value of insured property for purposes of determining the amount the insurer will pay in the event of a loss. It is typically defined as the cost to replace the damaged property with materials of like kind and quality, without any deduction for depreciation.
Basic building coverage is available up to $250,000 for home and up to $500,000 for commercial, while basic contents coverage is available up to $100,000 for home and $500,000 for commercial.
When you speak with an independent agent, you may decide that you need more coverage than is available in the basic plans. If so, you may opt for an ‘Excess Flood Policy’, which covers damage over and above your standard policy. In order to qualify for an ‘Excess Flood Policy’, you must meet the following criteria:
* Your Standard or Preferred Flood Insurance Policy must be provided by the National Flood Insurance Program (NFIP) or a company such allows you to Write Your Own (WYO) carrier.
* Your property must be insured for the maximum limits available from the NFIP/WYO.
Clear as mud? Of course it is! Your independent agent will lead you through the murky waters of flood insurance so that you can see how the pieces fit together and get the best coverage for your money.