real estate

Why You Need Flood Coverage

Your homeowners policy won't protect you if you're a victim of flooding -- but the federal government's program will.

I've been watching all of the devastating stories on the news about families who are losing their homes to the Midwest floods, and I've been thinking about my own protection. Were their losses covered by homeowners insurance?

Flooding isn't covered by homeowners insurance policies, but most people can get flood insurance through the National Flood Insurance Program. Your lender may require you to get flood insurance if you live in a high-risk area, but the coverage can be important even if you don't. The coverage takes effect after a 30-day waiting period, so it's a good idea to buy a policy as soon as possible so you'll have the protection before the end of this year's storm season.

Flood insurance is provided by the federal government but sold through local agents. Contact your homeowners insurance agent or find one at FloodSmart.gov.

Flood insurance can be inexpensive for low-risk areas. If you don't have a basement, the annual premium for a preferred-risk policy can cost as little as $348 for the maximum coverage of $250,000 for your dwelling and $100,000 for your possessions, or $388 if you have a basement. The same coverage can cost more than $2,500 per year in a high-risk area.

For more information about premiums -- and a lot of great tools to teach you about flood coverage and your risks -- go to the NFIP's FloodSmart.gov. Type your address into the site's one-step flood risk profile, and you'll immediately see your property's flood risk and your estimated premiums. The site also has a new "What Would Flooding Cost Me?" interactive tool, which shows how much damage you could face with floods of various levels. The site's Preparation and Recovery page also has a lot of information about how to protect your home and file a claim.

The government flood insurance program is a good start, but you may need more coverage. You can only get up to $250,000 in coverage for your dwelling and $100,000 for your possessions. And the federal insurance doesn't pay for living expenses if you have to move temporarily because of flood damage. You can get supplemental flood insurance through a few private insurers, such as Chubb and Fireman's Fund. These policies increase coverage limits to the same level as your homeowners policy, cover expenses while you're away from home because of the flooding, provide more extensive coverage for items damaged in your basement, and will insure your possessions up to their replacement value (federal coverage is limited to depreciated value).

Flood insurance, however, isn't an option in a few communities, such as Lake Delton and La Valle, Wis., which had dropped out of the federal flood insurance program and were hit hard by the recent flooding. The communities can petition to get back into the program, which could qualify them for aid; community and state officials are working on their options now. For more information see Wisconsin Emergency Management, where you can also learn about registering for federal disaster assistance. For links to other states' sites, see the Emergency Management Web site.

You can find out more about federal aid and disaster assistance from the Federal Emergency Management Agency at www.disasterassistance.gov.

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