Sylvia Group Account Executive
Every week, it seems, there's news of people losing everything they owned due to natural disaster.
Beyond the headlines covering mega-disasters, extensive damage to or total loss of home, business and other property is a daily occurrence — sometimes mitigated by insurance but often not. That's what led FEMA — the Federal Emergency Management Agency — to post the video "Why Do I Need to Rethink Insurance?" before all the aforementioned disasters even took place.
Created last June, the video explains the importance of flood insurance and notes multiple perils, including flooding, that are excluded from most basic homeowners insurance policies. Here's a key passage:
"Two out of three homes in the United States are underinsured when it comes to natural disasters such as earthquakes and floods, and many (homeowners) don't know it. This is mainly because many property owners don't carry enough insurance to cover damage from wildfires, extreme wind events and hurricanes. And most homeowners and renters insurance policies typically do not cover damage from natural disasters, like floods and earthquakes."
To view the video, click on the image below.
Why you need flood insurance
According to the FEMA-administered National Flood Insurance Program (NFIP), floods are the nation's most common natural disaster, with just one inch of water in a home capable of causing more than $25,000 in damage. And, again, flood damage is not covered under most homeowners insurance policies.
"Without flood insurance," the NFIP notes, "most residents have to pay out of pocket or take out loans to repair and replace damaged items. With flood insurance, you're able to recover faster and more fully.:
Flood insurance may not be cheap — especially in New England, where average annual premiums range from $1,060 in New Hampshire to a national high of $1,391 in Connecticut — but it does offer value.
Nebraska — where the average cost of flood insurance is $998 per year — faces more than $1.3 billion in losses caused by this month's flooding, state officials told the Associated Press. Nebraska Gov. Pete Ricketts said that more than 2,000 homes and 340 businesses were damaged or destroyed by the flood, at a cost of $85 million. Most are not covered by flood insurance.
A spokesperson for the Insurance Information Institute told CBS News that fewer than 10,000 flood policies are in effect statewide for Nebraska's 2 million residents. Presumably, many of those without coverage now wish they'd spent the $998.
While many of this month's victims in the Midwest live in areas previously damaged by flooding, nationally a significant percentage of flood claims — more than 20 percent, according to FEMA — come from outside high-risk flood zones, where flood insurance is less expensive. And while FEMA does come to the aid of those without flood insurance, its disaster grants pay an average of about $5,000 per household — far less than the average flood insurance claim of $30,000.
What flood insurance covers
As detailed by the NFIP, a typical flood insurance 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.
You can find an extended list of what is and what is not covered here.
The time to buy is now
Flood insurance policies typically include a 30-day waiting period between date of purchase and the date the policy goes into effect, so don't wait for forecasts of imminent flooding. Sylvia Group works with multiple companies that offer private flood insurance, so we can find the flood insurance policy that works best for you.
About Gorete Cadieux and Sylvia Group
With more than three decades of experience serving the personal insurance needs of Sylvia Group clients, Gorete Cadieux works with multiple companies to find the best available coverage at a price that makes the most sense for your budget. Using SPS — the Sylvia Protection System — she takes a consultative approach to working with clients, enabling them to make informed, educated decisions about their insurance policies.
Sylvia Group helps businesses and individuals protect their future by designing insurance, benefits and financial planning programs. We’re a 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.