Most home insurance policies don’t cover flood losses

Within official flood hazard zones, flood insurance is mandatory in order to get a federally insured mortgage.
But even when homeowners don’t live in a high-risk zone, they should consider getting flood insurance, experts say. That’s because standard policies don’t cover flood losses.
That said, endorsements are available on homeowner policies that provide limited coverage in the event of a drainage backup or sump pump overflow, Bill Ross Jr., managing partner of the Ross Insurance Agency on Lititz Pike.
Most flood insurance is provided through the federal National Flood Insurance Program. Property owners can purchase policies from agents or insurers who participate in the program. Agent referrals are available through the NFIP help center, 800) 427-4661.
Privately underwritten flood insurance polices are available as well, and now account for about 15 percent of U.S. premiums. Generally, the lower-risk the area, the more competitive private policies are with NFIP policies, Ross said.
Generally, the lower-risk the area, the more competitive private policies are with NFIP policies, Ross said.
There’s really no such thing as a typical premium, insurers said. They vary widely, depending on a property’s location, elevation and other characteristics.
NFIP policies have certain features that consumers should be aware of:
— Coverage is capped at $250,000 for structure and $100,000 for contents. Supplemental coverage is available through private policies.)
— There is normally a 30-day waiting period before coverage takes effect.
— Deductibles apply separately to the structure and its contents.
— Losses to equipment and furnishings below ground aren’t covered, except for utilities such as a furnace and hot water heater.
Private insurance doesn’t have a waiting period and multiple buildings can be covered under one policy, said Steve Faus, president of The Hess Agency in Manheim.
Here are some tips from United Policyholders, a nonprofit education and advocacy group for insurance consumers:
— Research your property’s flood history and flood risk: One tool is FEMA’s online Flood Map Service Center Input your address to see if your property is in a designated hazard area.
— Obtain quotes from a reputable insurance agent or broker: Find a knowledgeable agent with experience selling flood insurance. Seek quotes for both NFIP and private policies and compare the coverage and pricing.
— Know what you’re buying: Confirm that your policy covers the full cost of rebuilding, even if upgrades are required due to a stricter current building code. Be aware you may face additional expenses that aren’t covered, such as temporary housing, debris removal, or business interruption.