Your standard home owners insurance will protect you from listed perils but for a damage caused by flood, you need to purchase a separate policy. There is a National Flood Insurance Program (NFIP created by the Congress in 1968 in order that homeowners or renters may protect their property from flood damage.
Do you need flood insurance?
If you live in a high risk area that is prone to flood and have mortgages from federally controlled or insured lenders you must have flood insurance. Even if you do not reside in a flood prone zone, you may still buy flood insurance. If a flood does strike and you do not have insurance your home insurance will not protect you. Remember damages from flood need to be insured separately.
What does NFIP cover?
Flood insurance provides coverage for building and contents. However, the land that your property occupies is not covered.
A building coverage in flood insurance would include:
- Building and the foundation
- Plumbing system
- Electrical system
- Carpetting
- Central air conditioning equipment, water heaters, furnaces
- Refrigerators, built-in appliances or cooking stoves
- Curtains
- Dishwashers and portable microwaves
- Clothing, electronic equipment and furniture
- Cloth washers and dryers
- Replacement Cost Value – You will get the cost to replace any damaged property. Owners and single-family member will get reimbursements and primary residences that are insured within 80% of the replacement cost of the building.
- Actual Cash Value: It means the actual cash value minus the depreciation value will be given to the insured. Your personal property will always be valued using your actual cash value.
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