Record-breaking flooding has hit after one of the most devastating hurricanes the United States has known. In fact, the majority of homeowners in the southeastern areas of Lone Star state don’t even have flood insurance. And who can blame them? There was never a precedent in the area. Although hail and storms are a constant concern for property and business owners, no one would have guessed that rainwater would contribute to the tremendous damage suffered and spread across the country in recent days. Certainly not the home mortgage companies, because they don’t even ask borrowers to do it!
But now, as the death toll and people displaced from their homes seeking shelter have risen, one thing remains clear. When things finally settle down, homeowners and those in the commercial space will have to deal with the epic losses and damages on their own in the absence of adequate coverage.
For homeowners without flood protection, the facts are both uncomfortable and painful: Normal household contents insurance does not protect against flooding and the damage associated with it. The insurance industry is unequivocal in emphasizing that only those who have proactively purchased flood insurance will be compensated for water damage resulting from atmospheric conditions such as a hurricane, tropical storm or other severe weather event.
A little story about flood insurance:
It was 1968 when the US Congress drafted its flood program. Designed to help home and business owners from the financial devastation of a devastating flood, the policies are offered in all participating communities.
Flood insurance protects property owners or tenants from damage to buildings and household contents.
This includes the following:
• The structure and the building foundation
• Electrical and plumbing systems
• Central air conditioning, furnace, water heater
• Refrigerator, stove and all installed appliances, such as a dishwasher
• Carpet installed on bare floor
• Personal clothing and electronics
• Portable heaters and air conditioners
• Carpets that are not included in property insurance
• Washing machines and dryers
Typically, flood compensation claims include:
• Replacement Value: up to eighty percent of the amount needed to replace property damage in a single-family primary residence
• Actual Acquisition Value – replacement cost at the time of loss less physical depreciation
Note: The flood program always uses actual cost value to determine reimbursement of personal property.
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