Spring Best Time to Get Flood Insurance

The Insurance Information Institute is cautioning everyone to assess whether they are adequately covered for flood-related losses since warmer weather may trigger flooding, often in areas considered low risk.

"There is a 30-day waiting period for flood insurance policies to go into effect, so don't wait until the flood water is rising to call your insurance agent or insurance company representative," said Jeanne M. Salvatore, III senior vice president and customer spokesperson. "In fact, 90% of all natural disasters in the U.S. involve some type of flooding."

According to the institute, over 20% of all flood insurance claims "are filed in low-risk areas," since very few customers realize that the Federal Emergency Management Agency provides affordable options through its National Flood Insurance Program.

"Everyone should consider purchasing flood insurance," she said.

Part of the reason why customers do not protect their assets, the institute said, is lack of knowledge about certain important flood insurance facts. For example, often homeowners and renters do not know that standard insurance does not cover flood-related damage. Only a flood insurance policy issued by the federal government can serve that purpose. Moreover, these policies are easy to access offered by over 100 insurance companies and agents nationwide. They are available as replacement cost for the structure of the home options, or on an actual cash value basis for personal property. Annual premiums for a NFIP policy start at $112, according to FEMA, but may change upwards in high-risk areas. Maximum insurance amounts reach $250,000 for the structure of the home and $100,000 for the contents.

Risk assessment also is made easy for customers. Over 20,000 communities in the states voluntarily participate in the federal insurance program, thus covering almost all properties in all high flood-risk areas.

A growing number of private insurers, however, "have began offering excess flood policies intended to provide water damage protection to homeowners over and above the coverage provided by the NFIP policies," the institute said.

Average Premiums for Homeowners and Renters Insurance

Year Homeowners Renters

1998 $481 $170

1999 $488 $171

2000 $508 $175

2001 $536 $178

2002 $593 $186

2003 $668 $192

2004 $729 $195

Source: Insurance Information Institute

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