North Texas is no stranger to severe weather, especially this time of year. With hurricane season upon us, a potential heavy rain threat lingering in the Gulf today and a State still reeling from heavy hurricane and flood damage just 10 months ago, now is the time to consider purchasing food insurance to protect your property.
But making the decision to buy flood insurance for your personal property requires some thought, whether it is for your primary home or perhaps a rental or second property you may own. Many agents will tell you the National Flood Insurance Program (NFIP) has made the process very simple: fill out the form, check a box for how much coverage you THINK you need, sign the form and write a check. But its not that simple. There are some things you should consider before signing on the dotted line.
1.) Do you need specialized flood insurance coverage?
Consider flood insurance coverage in terms of the specifics of you and your property. Are you a landlord? Are you on a fixed income? Are you holding properties for income-generating purposes? By understanding your individual needs, your agent can more effectively help you choose the right flood insurance tool for you, including coverage, company selection and deductible options.
Private flood insurance enables property owners to supplement the NFIP product, providing coverage that homeowners expect from their homeowners policies for exposures such as outdoor property, detached structures, swimming pools and basements.
2.) Do you have a finished basement or pool?
The NFIP does not cover personal property in basements, so displaced homeowners or homeowners with built-out basements are responsible for these bills. If a storm surge dumps a ton of sand into your pool, are you prepared to shoulder the costs of the resulting clean-up? Private options can help and coverage may be available for swimming pool clean-up protection.
3.) Does your exposure exceed $250,000?
The value of custom-built homes continues to increase with replacement costs rising well above $250,000, the current limit on government-issued coverage. Now, owners of residential homes have options with higher coverage limits at affordable rates through private flood insurance programs, including both primary and excess programs that write significantly above NFIP limits.
4.) Would you need assistance for additional living expenses if you experience flood damage?
When weighing coverage options remember that the NFIP does not cover additional living expenses. With a private flood policy, the client can opt to add additional living expense coverage. This valuable coverage helps homeowners that have been displaced as a result of a flood by covering the costs of shelter and meals.
5.) Are your personal belongings valued at more than $100,000?
Consider your property holdings beyond the physical structures you own. For example, if you are a landlord or holding income-generating properties, you typically don’t need contents coverage. However, some clients may need more coverage than what is available from the NFIP to protect their personal treasures. Private insurance options can include coverage for personal property. Excess options are also available to provide even greater protection.
6.) Would you prefer a simplified application process?
Speed of delivery and streamlined processes of today’s private flood insurance options are increasingly attractive to clients (and agents alike!). Plus, you can obtain a quote without an elevation certificate and without providing property photographs in many cases.
7.) Would private insurance save you money?
Private products are not subject to federal surcharges or reserve fund assessments, and may be less expensive to purchase than NFIP flood insurance, particularly for structures not used as primary residences.
The world of flood insurance has come a long way since the standard NFIP blue form. If you're new to buying flood insurance or its been a while since you've shopped around, please call us today. Davis Dyer Max not only helps our clients make more informed decisions, our expertise enhances the value we bring to our relationship as we work with you to help protect what matters most – your families, homes and treasured possessions.