THURSDAY, APRIL 29, 2021
If your home floods, then you will want to make repairs and replace belongings that sustained water damage. Flood insurance is the benefit that will help you do so. 
Still, flood insurance is part of a very tightly regulated insurance market. While you will be able to insure your personal possessions under the policy, your coverage will still impose limits on the amount of assistance you can qualify to receive.
Those who want to replace damaged belongings following floods will need to optimize contents insurance within their requisite flood insurance policy. Here’s how to do so.
Flood Insurance for Contents
Under homeowners insurance, flood damage will not be covered. Generally, homeowners policies only cover damage from burst pipes, and sometimes from sewer backups or sump pump issues. However, they will not cover damage from weather-related floods (river swells, flash floods, storm surge etc.).
To get coverage for property damage done by such floods, you need to invest in flood insurance. Still, flood insurance is a lot different from the average private property insurance policy. Flood insurance policies are mainly provided and underwritten by the National Flood Insurance Program (NFIP). This is a government-managed flood insurance pool that provides coverage to property owners throughout the country. Residents of high-risk flood zones are often required to purchase this coverage.
Flood insurance will usually apply not only to your home itself, but also to your belongings. Policies backed by the NFIP will include up to $100,000 in contents insurance, though you can choose limits that are lower than this maximum level. However, there will still be limitations on the coverage which will require your attention.
Limitations on Contents Coverage
Flood insurance policies do not provide unlimited coverage. Therefore, you must ensure that your policy is appropriately tailored from the day you get coverage.
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First, you must ask your agent to add contents coverage to your flood insurance. Standard policies won’t automatically include coverage.
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Coverage will only provide the actual cash value (ACV) of damaged items. Therefore, if an item depreciates over time, you might not be able to recover the full cost of the lost item.
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If you have more than $100,000 in property losses, you’ll still only be able to get $100,000, at most, for coverage. If you choose a limit that is lower than $100,000, then you will only receive up to that dollar amount in compensation.
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Certain items — such as basement contents, vehicles and currency — will have little or no coverage.
If you have items of exceptional or unique value, we can help you determine if your policy will insure these items, and at what cost. We can also discuss potential ways that you can extend your possessions coverage to your advantage. If you ever have questions about flood insurance, then we’re here to help.
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