Rising Water Not Covered By Basic Homeowners or Renters Insurance

A mild winter and drought in many parts of the U.S. may have consumers believing they don't need to worry about flooding. However, according to FEMA, even one inch of water flowing into a 1,000 square foot home during a storm or from a rising river can amount to a loss in excess of $10,000 that is not covered by a basic homeowners policy. During National Flood Awareness Week, the National Association of Insurance Commissioners (NAIC) encourages all consumers to evaluate their need for a flood insurance policy and take time to prepare for a loss by making a home inventory.

Finding Coverage

Floods — or an excess of water (or mud) on normally dry land — are not covered by a typical homeowners or renter's policy. Most 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 about 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.

Making a Disaster Plan

A NAIC national survey found a significant lack of preparedness among consumers in documenting their belongings. 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® or Android smart phones. The app guides 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 email sharing.

More Information

Flood insurance is only sold by licensed insurance agents in your area. To protect yourself from a fraudulent insurance agent or company, before signing an 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 needs or preparing a disaster plan.

March 2012


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About the NAIC

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 information, visit insureUonline.org.

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