When it rains, it pours – and nobody knows that better right now than folks in Oklahoma and Texas. We’ve all seen the dramatic footage of cars submerged on freeways in Dallas and Houston, homes and businesses being washed away and the nonstop rescue efforts. It’s astonishing, especially when you consider that Texas was in the middle of a major drought just a month ago. But while the relentless storms have brought an end to the Lone Star State’s four-year water shortage, the flooding has swept away property, roads, businesses and precious lives.
It can happen in an instant.
What’s happening in Texas is a stark reminder of just how quickly you can be overcome by an unexpected disaster – especially when it comes to rising flood waters. Many who were caught off guard have commented about how they never saw it coming, they’ve never seen so much water before or they never expected it because they don’t live in a high-risk flood zone.
Unfortunately, flood waters don’t stick to a map.
In fact, according to FloodSmart.gov, people outside of mapped high-risk flood areas file almost 25 percent of all National Flood Insurance Program (NFIP) claims and receive one-third of Federal Disaster Assistance for flooding. If your home or business should suddenly be in the path of rising flood waters, would you be prepared? If your property is in a flood-prone area, you know you need flood insurance. But even if you aren’t in a high-risk flood zone, every geographic area is capable of flooding given the right circumstances. The NFIP has undergone major changes in recent years that could affect your insurance rates, and FEMA has been changing flood maps across the country. That means you could suddenly find yourself in a high-risk flood zone that carries higher insurance rates.
Protect your home.
Most homeowners' insurance policies exclude flood coverage. If your home is your principal residence, you’ll need to purchase a separate flood insurance policy and insure the building to at least 80 percent of the home's replacement cost to have your future flood claim adjusted at Replacement Cost Value. Do you already have flood insurance, but only have coverage for the building? Now might be the time to consider adding contents coverage to make replacing or repairing your furniture, appliances and other items in your home easier after a flood. If you were fully covered last year but have made changes to your property that requires an increase in coverage, don’t forget to update your flood insurance in addition to your homeowner’s policy.
Protect your business.
According to FloodSmart.gov, at least 25 percent of businesses that close after events such as a flood never reopen. It’s likely they didn’t realize that their property insurance policy didn’t include flood coverage. Between 2010 and 2014, the average commercial flood claim totaled almost $89,000. If your business is at risk, it’s vital to have a flood insurance policy with building and contents coverage. Without it, you face the real possibility of being out of business for good in the event of major flood.
Know the laws.
In March 2014, Congress passed the Homeowner Flood Insurance Affordability Act of 2014, which takes away many of the previous subsidies and discounts. But there’s also good news: the law puts a cap on how much premiums can be increased and how fast.
Another flood season is in full swing, and having flood insurance is the best way to protect yourself from a devastating financial loss and get back on your feet after a flood. For more information about protecting your business or home, contact the insurance experts at Higginbotham.