BASIC HOME INSURANCE DOES NOT COVER FLOOD DAMAGE:
What Consumers Need to Know Before Flood Waters Rise

This past winter much of the country was hit with above average snowfall. Now the National Oceanic and Atmospheric Administration (NOAA) is warning this spring may bring above average rainfall. According to NOAA that puts almost half of the U.S. at risk for spring flooding. The National Association of Insurance Commissioners (NAIC) suggests all consumers take stock of their belongings and their insurance policies to make sure they’re prepared in case the waters start to rise in their neighborhood.

Do You Have Coverage?

Floods – or an excess of water (or mud) on normally dry land – are not covered by a typical homeowners or renter’s policy. Some homes may be eligible for coverage under the The National Flood Insurance Program (NFIP). The NFIP offers flood insurance policies for homeowners or renters in communities that participate in the federal program. There is a 30-day waiting period after the purchase of a flood insurance policy before the coverage kicks in, so take that into consideration when determining if and when to purchase coverage.

Another danger of flooding that is not generally covered in a typical homeowners or renter’s policy is mold. Flood waters can be the source of mold damage long after the mess has been cleaned up. If you are concerned with this kind of damage, check your current policy closely to see if it includes coverage for mold caused by flooding. If it does not, contact your agent to find out what options are available. Many insurance companies offer coverage for a separate premium.

Do You Have a Disaster Plan?

A NAIC national survey found a significant lack of preparedness among consumers in documenting their belongings. Nearly half - 48 percent - said they did not have an inventory of their possessions. A home inventory is important for a number of reasons. It can help you determine the types and level of coverage you need before disaster strikes. And after a major loss, the home inventory can assist you in filing a claim.

There are several simple ways to start building a home inventory. You can download a home inventory spreadsheet here that will help get you started. If you are using an electronic or paper spreadsheet, remember to take pictures of your belongings, and save them in the same place as the home inventory.

Or you can download the free NAIC myHOME Scr.APP.book app for iPhone®. The app will guide you through capturing images, descriptions, bar codes and serial numbers, and then storing them electronically for safekeeping. The app even creates a back-up file for e-mail sharing.

More Information

You can find more information about what flood insurance covers and how to know if your home is in a flood area in this consumer alert.

Flood insurance is only sold by licensed insurance agents in your area. To protect yourself from a fraudulent insurance agent or company, before signing your application or paying for coverage, STOP. CALL your state insurance department. And CONFIRM that the agent and company you are dealing with is licensed to sell flood insurance.

Your state insurance department can also answer questions about flood insurance or a disaster preparedness plan. Click here to quickly find their contact information.

March 2011

About the NAIC

Formed in 1871, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and five U.S. territories. The NAIC has three offices: Executive Office, Washington, D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office, New York City. The NAIC serves the needs of consumers and the industry, with an overriding objective of supporting state insurance regulators as they protect consumers and maintain the financial stability of the insurance marketplace. For more consumer information, visit insureUonline.org.


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