FAILURE TO OFFER FLOOD, FAILURE TO OFFER ADEQUATE LIMITS, FAILURE TO OFFER EXCESS, FAILURE TO EXPLAIN COVERAGE…We write about this each year so insurance agencies can understand why you have an insured decline coverage.
Most Americans live or work in areas that have some risk of flooding. Flooding is caused by a number of conditions including severe storms, overflowing rivers or tidal waters, heavy rain, mudslides, levee failure and snowmelt. About 90 percent of natural disasters involve flooding in one way or another. Unfortunately, many people still don't have flood insurance, according to the Insurance Information Institute (I.I.I.).
With the arrival of spring, now is the time for Agencies to be selling homeowners, renters and businesses flood insurance. To help your customers understand the importance of flood insurance, the I.I.I. offers the following facts:
- Homeowners insurance does not cover flood damage. Only flood insurance will cover your losses in the event of a flood. Insurance for homeowners, renters and businesses is available, however, through the Federal Emergency Management Agency's (FEMA's) National Flood Insurance Program (NFIP).
- If your community participates in the National Flood Insurance Program, you are eligible to purchase flood insurance. There is a 30-day waiting period before your coverage takes effect, so don't delay. If the agency works with mortgage companies, be aware that if the closing is a cash closing, there probably is a 30 day waiting period also. GET THE FACTS !
- Floods and flash floods occur in all 50 states. The National Flood Insurance Program says that one out of four flood claims come from outside the floodplain, so you're more vulnerable than you think.
- Flood insurance is sold via the 91 participating insurance companies that write and service the policies through a special arrangement with the Federal Insurance Administration (FIA).
- Flood insurance costs are reasonable. The average premium for an NFIP flood insurance policy is $382 per year. The average coverage amount is $137,299. The maximum coverage amounts are $250,000 for a single-family home and $100,000 for its contents. Renters can also purchase up to $100,000 of contents coverage. Maximum coverage for a business is $500,000 for the building and $500,000 for contents. For a home in a lower-risk area with no history of flooding, a preferred-risk policy may be purchased for as low as $106 (no basement) or $131 (with basement) for $20,000 worth of building coverage and $5,000 worth of contents coverage. To find out more information about flood insurance, contact the NFIP at: http://www.fema.gov/nfip/cost.htm or their toll-free number at 800-427-4661.
- Disaster aid is only available in federally declared disaster areas. Only a small minority of all flooding incidents are disasters. Flood insurance claims are paid even if the President does not designate a flood as a federal disaster.
- Federal disaster assistance usually comes in the form of a loan. If your area is included in a major disaster declaration, low-interest loans are available from the federal government. But these loans are just that - loans - and must be paid back, with interest. A flood insurance policy offers better protection from flood losses.
As a Utica representative, Utica just released the following one page Risk Management Alert entitled: “ Recent Hurricanes Producing More Flood Claims than Wind Clams”