What You Need to Know About Flood Insurance

• Warning: your Property Policy doesn’t carry Flood Insurance.  While a limited amount of coverage may be available by endorsement – in most cases – it’s not enough.

 Flooding can happen at any time, and as your local agent, I want to make sure  your business is prepared to handle the financial burden of a flooding event when it occurs.

Many business owners underestimate their flood risk and overestimate the amount of federal funding they will receive, believing they can rely solely on disaster assistance for recovery after a flood.

Here are five important differences between disaster assistance and flood insurance:

1.            Disaster Declarations: Disaster assistance requires a Major Disaster Declaration from the President, which can be a lengthy and complicated process. With flood insurance, individuals can make a claim almost immediately after a flood event without having to wait for a declaration.

2.            Coverage: Both disaster assistance and flood insurance cover damage to your primary residence; however, federal assistance is not designed to fully restore your home to its pre-disaster condition. Flood insurance offers building and contents coverage that is customizable to your needs.

3.            Payout: FEMA disaster grants average about $5,000 per household, while the average flood insurance claim payment over the past 5 years was approximately $69,000. Insurance payouts also do not need to be repaid, while some forms of disaster assistance must be repaid with interest.

4.            Duplicative Expenses: You may be eligible to receive both disaster assistance and a flood insurance payout as long as the funding is applied towards different damage costs. FEMA cannot pay for damages already covered by your insurance.

5.            Future Flooding: If you receive disaster assistance after a flood, you will be required to purchase and maintain a flood insurance policy going forward to receive aid for any future flooding events.

Ultimately, you want to receive the maximum amount available to fully recover after a flood. Federal disaster assistance is NOT a guarantee. Flood insurance is the best form of financial mitigation and preparedness to protect your church or non-profit organization.

Reach out to me with any questions you have or to learn more about the right level of coverage for your business. You can also learn more about your flood risk by visiting www.floodsmart.gov.

Sincerely,

Mike Russell, MA, MBA, DSL, MLIS

Mike Russell & Associates, Inc

Licensed Insurance Consultant