Basic Homeowners Insurance Does Not Cover Floods:
According to the National Flood Insurance Program (NFIP), all 50 states have experienced floods or flash floods in the past five years. Even just a few inches of water can cause tens of thousands of dollars in damage, so before you're faced with rising water in your area, the National Association of Insurance Commissioners (NAIC) offers this information to help you get smart about your flood insurance options. The NAIC also has tips on how to prepare before a storm hits and what to expect if you need to file a claim.
Flood Insurance Basics
The standard flood insurance policy pays for direct physical damage to your insured property up to the replacement cost or actual cash value (ACV) of actual damages, or the policy limit of liability, whichever is less. It covers structural damage, including damage to the furnace, water heater, air conditioner, flooring and debris clean-up. Coverage for basements, crawlspaces and ground-level enclosures on elevated homes is limited, so talk to your insurance agent about any restrictions in your policy. The contents of your home are not covered under a standard policy.
How to Buy Flood Insurance
It's important to note that flood insurance does not go into effect immediately. Most policies have a 30-day waiting period, so plan accordingly if you are looking to purchase flood insurance.
Flood Insurance Reform
To help ease the burden of these increases, the Homeowner Flood Insurance Affordability Act of 2014 was signed into law in March 2014. This law does not completely replace Biggert-Waters, but it does modify or repeal some provisions of the previous law. One of the most significant changes in the Homeowner Flood Insurance Affordability Act is that it lowers or prevents rate increases for some flood insurance policyholders. It also provides refunds to policyholders paying increased premiums due to Biggert-Waters.
For more information on how flood insurance reforms may impact you, contact your insurance provider or state insurance department.
Your state insurance department can also answer questions about flood insurance or severe weather threats in your area.
|The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For consumer
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