How much do you know about flood insurance? Probably very little, unless you’ve had an experience with flooding or your insurance agent has discussed it with you. Check it out – take this quick What the Flood interactive quiz to see if you understand the insurance protection that would apply should common water damage scenarios occur. The quiz is promoted by the National Association of Insurance Commissioners (NAIC), who offer great info on Understanding Flood Insurance.
Here are a few common flood insurance myths
- Myth: I don’t need flood insurance because I already have homeowners insurance.
Reality. Homeowners insurance rarely covers flood damage – talk to your agent.
- Myth: I don’t need flood insurance because I don’t live in a high-risk flood zone.
Reality: More than 20% of the National Flood Insurance Program’s (NFIP) claims come from outside high-risk flood areas.
- Myth: It’s already hurricane season so I am too late to buy flood insurance this year.
Reality. You can purchase flood insurance any time, but it generally takes effect 30 days after purchase for coverage to take place.
Here’s a handy NAIC infographic that shows homeowners vs flood insurance coverage:
Why not have a chat with your insurance agent to find out if flood insurance makes sense for you? Here are some great questions that NAIC offers as discussion points when you talk to your insurance agent about flood insurance.
The east coast is still recovering from Hurricane Irene and Tropical Storm Lee, and other heavy rain events. The succession of storms and hurricanes this season have resulted in fleets of vehicles being inoperative from flood damage. Unscrupulous car dealers are notorious for turning around these flood damaged vehicles and selling them to unsuspecting buyers. As a result the National Insurance Crime Bureau has released this list of Flood Vehicle Fraud Prevention Tips.
Here is what they recommend:
- Select a reputable car dealer.
- Inspect the vehicle for water stains, mildew, sand or silt under the carpets, floor mats, headliner cloth and behind the dashboard.
- Check for recently shampooed carpet.
Inspect the interior upholstery and door panels for fading.
- Check for rust on screws in the console or areas where water normally doesn’t reach.
- Check for mud or grit in the spare tire compartment, alternator crevices, behind wiring harnesses, around the small recesses of starter motors, power steering pumps and relays.
- Check inside the seatbelt retractors by pulling the seatbelt all the way out and inspect for moisture, mildew or grime.
- Check door speakers as they will often be damaged due to flooding.
- Have a certified mechanic inspect the vehicle prior to purchasing it.
- Ask about the vehicle’s history. Ask whether it was in any accidents or floods.
- Inspect the title and ownership papers for any potential or questionable salvage fraud.
- Conduct a title search of the vehicle.
- Look under the hood for signs of oxidation. Pull back rubber boots around electrical and mechanical connections for these indicators: Ferrous materials will show signs of rust, Copper will show a green patina.
- Aluminum and alloys will have a white powder and pitting.
- Trust your instincts: If you don’t like the answers or the deal sounds too good to be true, walk away!
If you are concerned the vehicle you are looking at may have been declared salvage from flood damage, you may want to check out our previous post, Consumer alert: don’t buy a flood-damaged car for specific ways to confirm this, such as researching your car’s Vehicle Identification Number for a history report. Also if you discover a car dealer who is committing this type of fraud, make sure you inform the NICB at 800-TEL-NICB.
Even if you aren’t shopping for a vehicle you should be concerned about the aggressive flooding this year. According to The Atlantic Oceanographic and Meteorological Laboratory the Atlantic Hurricane Season lasts until November 30th, meaning there is still a chance of even more flooding that could affect your car your home.
Take steps to protect your property. Your car insurance may cover more than you think but homeowners beware: flood damage is not covered by most homeowners policies, you would require special flood coverage. Contact your insurance agent to ensure that your vehicle and your home are protected against any future flood damage before it’s too late.
From New Hampshire to Wisconsin to Maryland, state insurance commissioners throughout the country are urging residents to buy flood insurance. Flood insurance is particularly important as we count down to this year’s hurricane season. Your homeowners insurance may cover you for water damage from a burst pipe, but if your water problem was started by Mother Nature, you are likely out of luck since most policies do not cover flood damage.
While you may think your flood risk is negligible, floods and flash floods happen in all 50 states. Here are a few interesting flood facts you may not know:
- Your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire.
- Last year, one-third of all claims paid by the National Flood Insurance Program. were for policies in low-risk communities.
- A car can easily be carried away by just two feet of floodwater.
- Last year, one-third of all claims paid by the National Fllod Insurance Program were for policies in low-risk communities.
- Most homeowners insurance does not cover flood damage.
To find out the risk for your home or your business, enter your address to create your flood risk profile and assess your risk of financial loss. Or check your local FEMA flood map. You can also use this interactive tool to see the inch-by-inch cost of a flood in your home – as little as an inch or two of water in your home can add up to thousands of dollars in repair.
Talk to your agent about flood insurance – if you are in a low to moderate risk zone, insurance can be very affordable. Your agent will know the options and will know if your community participates in the National Flood Insurance Program (NFIP), which helps homeowners, renters, and business owners to secure coverage.