According to the Federal Emergency Management Agency (FEMA), floods are the most common, and most costly, natural disaster. Floods can happen anytime and anywhere, and they can happen fast. Flood damage is not covered under a standard homeowners policy.
What is a flood?
A flood is an excess of water (or mud) on land that's normally dry. The National Flood Insurance Program (NFIP) defines a flood to be a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties (at least one of which is the policyholder's property) from overflow of inland or tidal waters; unusual and rapid accumulation or runoff of surface waters from any source; mudflow; or collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining, caused by waves or currents of water exceeding anticipated cyclical levels.
What is flood insurance?
Flood insurance is a special policy that is federally backed by the NFIP and available for both homeowners and businesses. You can buy flood insurance for your home or business regardless of whether the property is in or out of a floodplain, as long as the property is located in a participating community.
You may buy flood insurance covering up to $250,000 of flood damage to your home. A standard flood policy will cover structural damage, including damage to the furnace, water heater, air conditioner, floor surfaces (carpeting and tile) and debris clean up. For an additional premium, you also may buy flood coverage for up to $100,000 of damage to the contents of your home.
Coverage is available for up to $500,000 for non-residential buildings and their contents.
What does flood insurance cover?
A Standard Flood Insurance Policy is a single-peril (flood) policy that pays for direct physical damage to your insured property up to the replacement cost or Actual Cash Value (ACV)
What is covered at replacement coverage and what is covered at ACV?
Replacement Cost Value (RCV) is the cost, without depreciation, to replace that part of a building that is damaged. To be eligible, three conditions must be met:
1. The building must be a single-family dwelling; and
2. The building must be your principal residence at the time of loss, meaning you live there at least 80 percent of the year; and
3. Your building coverage is at least 80 percent of the full replacement cost of the building, or is the maximum available for the property under the NFIP.
Actual Cash Value (ACV)
ACV is Replacement Cost Value at the time of loss, less the value of its physical depreciation.
Some building items such as appliances and carpeting are always adjusted on an ACV basis.
Personal property is always valued at ACV.
How much does flood insurance cost?
Premiums for flood insurance will vary depending upon your risk level for a flood loss, the amount of coverage you choose, the type of coverage you need and your deductible.
How can I buy flood insurance?
You can purchase flood insurance for your home or business regardless of whether the property is in or out of a floodplain, directly from your property and casualty insurance agent, or insurance company if your community participates in the NFIP. To find out if your community participates, visit www.fema.gov/fema/csb.shtm.
Your insurance agent or insurance company also can confirm whether flood insurance is available to you and what it would cost.
Plan ahead - waiting period
It is very important to plan ahead. A flood insurance policy normally will not go into effect until 30 days after you purchase the policy.
Flood safety tips
For more information about flood insurance, visit NFIP online at www.fema.gov/business/nfip or contact the North Dakota Insurance Department at 1-800-247-0560.
- For personal safety, identify what storm shelter is available to you and prepare an evacuation plan.
- Make sure you have bottled water, a first aid kit, flashlights, a battery-powered radio, non-perishable food items, blankets, clothing, prescription drugs, eyeglasses, personal hygiene supplies and a small amount of cash.
- If you need to evacuate your home, turn off all utilities and disconnect appliances to reduce the chance of additional damage and electrical shock when utilities are restored.
- Take proactive steps to protect your property from loss. Be sure there is no loose siding on your home and no damaged or diseased trees growing over your home.
- Take an inventory of your personal property, such as clothes, jewelry, furniture, computers and audio/video equipment. Photos and video of your home, as well as sales receipts and the model and serial numbers of items, will make filing a claim simpler. In addition, add insurance information to your inventory information - the name of your company and agent, policy number and contact information.
- Move all of your important documents to a safe location. Take them with you when you evacuate or store them in a safe deposit box outside the area.