You are about to buy a home and were sure you thought of everything. Everything, that is, except for flood insurance. Wait, what? Yes, you will need a separate flood insurance policy if you own or rent residential or commercial property in a high-risk area. Homeowners often assume that any damage caused by flooding falls under their regular homeowner’s insurance policy but then learn the hard way this is not true.
What is Flood Insurance?
Flood insurance is a separate type of insurance designed specifically for property damage caused by heavy rain, melting snow, blocked storm drains, failure of a local levee dam, or a coastal storm surge. From an insurance perspective, flooding is a catastrophic event that requires a special policy. A standard homeowner’s insurance policy only covers internal water damage such as a burst pipe or rainwater in the home.
Am I Required to Have Flood Insurance?
The answer to this question depends on a few variables. First, do you live in an area considered high-risk for flooding? We recommend checking out the flood risk map developed by the Federal Emergency Management Association (FEMA) to see if it includes your zone.
You should also know that the State of Louisiana Governor’s Office of Homeland Security and Emergency Preparedness states that flooding is a considerable risk in the state. Sadly, an average of 91 Louisianans lost their lives during a flood between the years of 1980 and 2010.
Depending on the zone where your home sits, your mortgage lender may require you to purchase flood insurance as a condition of the loan. You can pretty much guarantee you will face this requirement if the government backs your mortgage with a program like Freddie Mac or Fannie Mae. Some lenders will still require it if you live just outside a high-risk area for flooding.
Different Types of Flood Insurance Available
Arnold Insurance Company (AIC) offers several types of flood insurance policies based on customer needs. When you meet with Wade Dickson, Insurance Executive at AIC in Alexandria, LA, he will ask several questions about your property to understand your concerns.
One important thing to keep in mind when considering a flood insurance policy is that most do not go into effect until 30 days after you purchase it. The one exception is buying a home. Mortgage lenders want to protect their investment, which means your new flood insurance policy takes effect right away. A flood insurance policy covers water damage from a natural disaster not covered by your main policy.
Renters have valuable items they do not want to lose to flooding just as homeowners do. Like homeowner insurance policies, however, renter insurance does not cover damage caused by flooding, and you will need a separate policy. You can include the replacement value of everything you listed on your renter’s insurance application on your flood insurance application.
If you own a business in Louisiana, flood insurance provides the replacement value of your inventory, office supplies, and other assets stored inside the building. When you think of all the hard work and investment that went into your business, there really is no such thing as having too much financial protection.
How We Can Help
Wade Dickson at Arnold Insurance is available to help you with everything flood insurance related. Contact Wade here for more information. Not in Louisiana? No worries! Click the button below for flood insurance information in our other markets.