The 2010 hurricane season is entering what is typically its most active period, and Florida is one of the three most hurricane-prone states. To protect your home or business property, you need to act now to buy flood insurance.
Homeowners insurance and standard business policies don't cover damage from flooding, and the National Flood Insurance Program (NFIP) is only authorized to write new residential and commercial policies through September 30.
Forecasts call for a very active hurricane season in 2010, and at least a million barrels of oil have been spilled in the Gulf of Mexico, making it essential for Florida homeowners on any area of the coast to make sure they have the right insurance.
According to the Insurance Information Institute, the history of the NFIP shows that there is no guarantee Congress will renew the program this year even though hurricane season continues through the end of November.
"The program was allowed to lapse for weeks starting on June 1 of this year, the official start of the hurricane season, and the NFIP could very well meet the same fate again this fall," said Michael Barry, vice president of Media Relations at the Insurance Information Institute.
Six Things You Need to Know About Flood Insurance
1. Homeowners insurance, renters insurance, and business insurance policies do not cover flood damage, and that includes damage from hurricane storm surges. They typically do cover damage from hurricane winds.
2. Yes, NFIP policies do cover oil damage from oily flood waters, according to FEMA. That could be important to those in areas affected by the Gulf oil spill.
"Oil in flood water is not a new issue for the NFIP, especially in riverine flooding," explained James A. Sadler, Director of Claims for the National Flood Insurance Program. "In the past, the mixing of oil and other pollutants in flood waters resulted from damage caused by a storm."
3. There is a 30-day waiting period for a flood insurance policy to kick in. You will not be covered if you wait to buy a policy until flooding in your area is imminent.
4. The federal government makes it easy to buy flood insurance. Nearly 100 insurance companies sell flood insurance policies through the National Flood Insurance Program. Policies are available for homeowners, renters, condominium owners, condo associations and businesses. To find an agent, go to FloodSmart.gov or call (888) 379-9531.
5. Damage not covered by NFIP insurance includes:
- Water damage from an event not defined by the NFIP as a flood (a general and temporary condition of partial or complete inundation of two or more acres of normally dry land)
- Damage caused by pollutants to commercial properties in excess of $10,000
- Damage to the ground, soil or land
- Testing or monitoring the property for pollutants, unless required by law
- The cost of compliance with state laws or local ordinances, including those requiring special methods for removing oil
6. Excess flood insurance policies are available. Many private insurance companies offer policies to cover water damage to homes and businesses beyond that covered by NFIP insurance. However, as always it is essential to work with a company that has a good record of paying these claims.
- "NFIP Policies Cover Property Damage Caused by Oil in Flood Waters" (Insurance Information Institute, July 15, 2010)
- "Many Lack Flood Coverage as 2010 Hurricane Season Nears Its Peak" (Insurance Information Institute, August 12, 2010)