When you look at your homeowner's insurance policy, you might think you have all the coverage you could possibly need. After all, the declarations page lists and explains everything that's covered: dwelling, other structures, personal property, loss of use, liability and medical payments. You can also see that, under the endorsement section of the policy, you have extended dwelling coverage on the home, guaranteed replacement cost coverage for its contents, and identity fraud expense coverage.
What more could you possibly need?
Well, while standard home insurance policies provide coverage for disasters such as fire, lightning strikes and hurricanes, they do not provide coverage for floods — even for flooding from a hurricane. For that, you need flood insurance.
Now, if you were to purchase a home on or near the water, especially in a high-risk zone known as a "special flood hazard area," you probably would be required to have flood coverage in addition to a standard homeowners policy. If you live in a moderate- or low-risk area, flood insurance might not be mandatory — but it is advisable, as many victims of last August's record flooding in Louisiana can attest.
Here in New England, no flooding appears imminent, but if spring's heavy rainfall is followed by above-average precipitation during the remainder of the summer, we could be especialy susceptible to flooding should a tropical storm hit during the remainder of hurricane season. Uncovered losses from flooding can be devastating.
Who offers flood insurance, and what does it cover?
In selecting flood coverage, there are two basic options:
National Flood Insurance Program: The NFIP is administered by the Federal Emergency Management Agency (FEMA), with coverage limits typically capped at $250,000 for your home and $100,000 for belongings.
Private Flood Insurance: If you live in a high-risk zone, you can get higher coverage limits with private flood insurance — typically $500,000 for your home, and $250,000 for belongings.
You may find that the private flood insurance premiums run slightly lower than the NFIP, especially in special flood hazard areas. Be aware, though, that some banks are hesitant to accept private flood policies for federally backed home loans. Also, private companies may do extensive risk analysis of a property and choose not ot offer coverage. This means that you could have coverage one year, then be non-renewed after an analysis the next.
As detailed by the NFIP, a typical policy covers:
- the insured building and its foundation
- electrical and plumbing systems
- central air conditioning equipment, furnaces and water heaters
- refrigerators, cooking stoves and built-in appliances such as dishwashers
- permanently installed carpeting over unfinished flooring
- permanently installed paneling, wallboard, bookcases and cabinets
- window blinds
- debris removal
- personal property in the insured building.
Insuring coastal property
In recent years, some insurance carriers have become increasingly reluctant to insure property near the Massachusetts and Rhode Island coast. Some will not insure homes closer than one mile from the coast. Others will only go as close as three miles.
To determine whether your home is part of a hazard zone, visit FEMA's flood map service center.
When purchasing insurance for your property near the water:
- You'll want to select a higher deductible to save on premium, the best option being a $1,000 deductible.
- Your policy may include a hurricane deductible, which applies to damage solely from hurricanes. These deductibles are often found on homeowners policies covering properties near the coast, and are typically a percentage of the Coverage A Dwelling Value on the insurance policy. While a regular homeowners insurance policy deductible is a fixed dollar amount, a hurricane deductible might be 1% to 5% of a home's value. For example, if your home is insured at $800,000 and your policy has a 2% hurricane deductible, your deductible is $16,000.
Making sure you have all the right coverage can be a frustrating process, but it doesn't have to be. An experienced insurance agent can help by offering you the peace of mind that your home will be insured properly. There is a standard 30-day waiting period before your policy goes into effect, so don't wait to protect your home.
About Matthew Boyle and Sylvia Group
A licensed insurance producer and Certified Insurance Service Representative (CISR), Matthew Boyle is passionate about informing and educating his clients on the coverage they should consider and the products they ultimately purchase. Whether the need is boat or watercraft insurance, homeowners insurance, auto insurance or specialized coverage, he’s committed to designing customized programs that protect his clients and their assets. Matt appreciates meeting and working with new people on a regular basis, and with 15 years’ experience in personal insurance, the last eight as a successful sales executive, he enjoys sharing his expertise. As an independent agent working with the accomplished team at Sylvia Group, he’s able to offer clients options and resources unavailable through most other agencies and direct sellers.
Sylvia Group helps businesses and individuals protect their future by designing insurance, benefits and financial planning programs. We’re a third-generation, locally owned agency known for our commitment to our clients and our community, as well for our industry expertise. Founded in New Bedford, MA, in 1950, headquartered in neighboring Dartmouth, and serving businesses and individuals throughout Massachusetts, Rhode Island and beyond, Sylvia Group is certified as a Woman Owned Business Enterprise with the Massachusetts Supplier Diversity Office and has the distinction of being the first six-time recipient of the Five Star designation awarded by the Massachusetts Association of Insurance Agents (MAIA) for all-around agency excellence.