Flood Insurance

Protect Yourself

Flooded Home

Since standard homeowners insurance doesn't cover flooding, it’s important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the U.S.

In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

The National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA), which works closely with nearly 90 private insurance companies to offer flood insurance to property owners and renters. In order to qualify for flood insurance, a community must join the NFIP and agree to enforce sound floodplain management standards.

The NFIP, a federal program, offers flood insurance, which can be purchased through Fitts Insurance and other property and casualty insurance agents. Rates are set and do not differ from company to company or agent to agent. These rates depend on many factors, which include the date and type of construction of your home, along with your building’s level of risk.

Understanding Flood Coverage

Building Versus Contents Coverage

Flood insurance protects two types of insurable property: building and contents. The first covers your building, the latter covers your possessions; neither covers the land they occupy.

Building coverage includes:

  • The insured building and its foundation
  • The electrical and plumbing system
  • Central air conditioning equipment, furnaces, and water heaters
  • Refrigerators, cooking stoves, and built-in appliances such as dishwashers
  • Permanently installed carpeting over unfinished flooring

Contents coverage includes:

  • Clothing, furniture, and electronic equipment
  • Curtains
  • Portable and window air conditioners
  • Portable microwaves and dishwashers
  • Carpeting that is not already included in property coverage
  • Clothing washers and dryers

The two most common reimbursement methods for flood claims are : Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to within 80% of the building’s replacement cost.

All other buildings and personal property (i.e. contents) are valued at ACV. The ACV is the RCV at the time of loss minus physical depreciation. Personal property is always valued using the ACV.

So now that you know what Flood Insurance covers, let's talk about FLOODS.

What is a Flood?

Flood insurance covers direct physical loss caused by "flood." In simple terms, a flood is an excess of water on land that is normally dry. Here is the official definition used by the National Flood Insurance Program.

A flood is a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:

  • Overflow of inland or tidal waters;
  • Unusual and rapid accumulation or runoff of surface waters from any source;
  • Mudflow*; or
  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above."

*Mudflow is defined as "A river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water..."

Three Important Facts About Your Flood Policy

A Standard Flood Insurance Policy is a single-peril (flood) policy that pays for direct physical damage to your insured property up to the replacement cost or Actual Cash Value (ACV) (See "How Flood Damages Are Valued") of the actual damages or the policy limit of liability, whichever is less.

  1. Contents coverage must be purchased separately.
  2. It is not an agreed valued policy. An agreed valued policy pays the limit of liability in the event of a total loss. Flood insurance pays just the replacement cost or ACV of actual damages, up to the policy limit.
  3. It is not a guaranteed replacement cost policy. A guaranteed replacement cost policy pays the cost to rebuild your home regardless of the limit of liability. For example: Your home is totally destroyed by a fire and it costs $200,000 to rebuild. If your homeowners insurance policy is a guaranteed replacement cost policy with a $150,000 limit of liability on the building, you would receive $200,000. Flood insurance does not pay more than the policy limit.

If you currently don't have flood insurance and you are considering buying some, don't wait. New flood insurance has a 30 day waiting period. You can purchase coverage today, but it won't go into effect for at least 30 days.

For more information or to request flood insurance from Fitts Insurance, please contact us!