ALERT
Most homeowners are unaware that flood insurance policies do not take effect immediately after purchase.
Spring brings warmer weather, but also a greater risk of flooding. Melting snow, heavy rainfall, and seasonal storms can quickly turn into costly water damage for homeowners. Many are caught off guard, assuming their homeowners’ policy covers flood, when it usually does not. Additionally, most homeowners are unaware that flood insurance policies do not take effect immediately after purchase.
Flood damage can be financially devastating, but it does not have to catch you by surprise. Planning ahead now can help you avoid paying out of pocket later.
Who Needs Flood Insurance?
Flood insurance is not just for homeowners in FEMA-designated high-risk areas. In fact, more than 25% of all flood claims come from properties in low or moderate-risk zones (FEMA). If your home is near a body of water, in a low-lying area, on a street with poor drainage, or in a region that sees heavy spring rainfall, you could be at risk.
The 30-Day Waiting Period
If you purchase a National Flood Insurance Program (NFIP) policy, it won’t take effect for 30 days. That means if you wait until a storm is forecasted, it will be too late to get coverage in time.
Some private flood insurance options offer shorter waiting periods (typically 10 to 15 days) and may provide immediate coverage if your mortgage requires it. However, private policies may have different coverage terms and limits.
Flood Policy Limits
The NFIP caps residential building coverage at $250,000 and contents coverage at $100,000. For many homeowners, especially those with high-value homes or belongings, this is not enough. Private flood insurance can be used to supplement NFIP coverage, offering higher secondary limits and broader coverage including coverage for temporary living expenses, which NFIP does not provide. Note that while private primary flood insurance policies vary in coverage, excess flood insurance is designed to provide higher limits above those offered by an NFIP policy. If your home or belongings exceed NFIP limits, adding excess flood coverage can help ensure you are fully protected.
Why Homeowners Should Act Now
- Flooding can happen anywhere: Flooding is not just a coastal issue. Heavy rain, snowmelt, and backed-up storm drains can flood neighborhoods far from the ocean.
- Standard Homeowners’ Policies do not cover flood: Standard homeowners’ insurance usually excludes flood damage. Without separate flood coverage, repairs and replacements come out of your own pocket.
- Flood damage is expensive: Even a few inches of water can cause tens of thousands in damage to flooring, furniture, appliances, and more. Even minimal flooding can lead to significant expenses. According to FEMA, just one inch of floodwater can cause approximately $25,000 in damage to a home. This underscores the potential financial impact of flooding and the importance of having appropriate coverage.
What Homeowners Should Do Now
- Check your current coverage: Review your homeowners insurance policy and confirm whether you have flood protection. Most homeowners’ policies do not have flood coverage. (NFIP)
- Explore your options: Compare NFIP and private flood insurance to see what fits your needs. Pay attention to coverage limits, exclusions, and waiting periods. Consider supplemental private coverage if your home exceeds NFIP limits.
- Act promptly: Since there is a delay before coverage begins, do not wait. Getting flood insurance now helps ensure your home is protected before the next storm hits.
Act now to secure the right flood coverage before spring storms arrive. Contact SterlingRisk today to explore your flood insurance options and protect what matters most.
DISCLAIMER: This article is provided by SterlingRisk for informational purposes only and should not be taken as legal advice. For legal advice, consult with your legal counsel.
