Flood Insurance

Most home owners do not realize flood losses are not covered by your home policy. It is a common misconception that home insurance covers damages that arise from a flood (flowing water).

Why might you need flood insurance? Every year floods damage homes and property. Most of the damage happens within the flood zones. However, just because you are not in a flood zone does that mean that you are safe and will never need flood insurance. Is your home is in an Arizona flood zone?

National Flood Insurance

Congress established the National Flood Insurance Program (NFIP) in 1968 as a way to provide protection to consumers. While we will issue your flood insurance policy for you, all flood policies are written through the NFIP.
The following statistics are provided by F.E.M.A.:

Your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9% chance of fire. About 25% of all flood claims are for policies in low-to-moderate-risk communities. Since 1978, over $31 billion for flood insurance claims and related costs have been paid.

Over 5 million people currently hold flood insurance policies in more than 20,000 communities across the U.S.

A “flood” as described by the NFIP is simply the collection of excess water on land that is normally dry.

Who Needs Flood Insurance

You don’t have to live near a river or ocean to be at risk for a flood. In Arizona, most types of floods occurs from a flash flood, which can strike anywhere at any time when a large volume of rain falls within a short time. Even a couple inches of rain can cause your home to suffer flood damage.

A standard flood policy will cover structural damage, furnace, water heater and air conditioner, flood debris clean up, and floor surfaces. You can also buy added coverage for furniture and other personal property.

If you live in an area considered a high-risk area and you have a mortgage that is secured by the federal government, federal law requires you to purchase flood insurance. Typically, your mortgage company will inform you during the closing process or your real estate agent during the purchase process if your home is in a flood zone.

Flood Insurance Coverage

A homeowner can get coverage on their flood insurance for up to $250,000 and contents for $100,000. A renter can cover their belongings for up to $100,000. Give your insurance agent a call to get started on your Arizona flood insurance quote.

Wildfires Burning, but Arizona Home Insurance Buyers Urged to Get Flood Insurance?

Arizona Flood Insurance due to wild firesWildfires continue to rage all over Arizona, and news agencies ABC15CBS5 and AzFamily report progress as each is managed and eventually extinguished. When the wildfires are gone, so is the Earth’s natural protection. The loss of underbrush and rooted plants can cause many problems. You would think that the primary concern for homeowners in regions prone to wildfires would be to carry homeowners coverage to protect their buildings and personal property.

So why are residents being encouraged to purchase flood insurance in the midst of so many wildfires? Consider these facts:

  • Wildfires destroy vegetation such as underbrush and trees.
  • The loss of this vegetation through intense fire leaves only charred ground.
  • Ground that is burned no longer has the ability to easily absorb water.
  • The increased run-off of rainwater can cause mudflow or flooding.
  • The areas at greatest risk are downstream or downhill from burned areas..
  • The risks are more substantial during spring thaws, heavy rains, or winter storms.

What are the risks? Loss of property ranks highest with a flood. According to recent reports:

From 2002 to 2011, total flood insurance claims averaged more than $2.9 billion per year. In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage. However, losses due to flooding are not covered under typical homeowners and business insurance policies.

How can homeowners protect themselves?

The unfortunate answer is that there are very few ways to reduce your risks of damage from floods or mudflows. The debris and silt that accompany these conditions also increase the level of damage. Until the vegetation returns to a healthy level in the areas affected by the wildfires (uphill or upstream from these burned areas), the ground is simply unable to absorb or reduce the flow of rainwater and snow melts. These simple steps can improve your conditions should you find yourself faced with potential flooding:

  • Avoid loss of life or injuries, evacuate. Planning ahead for a safe location to move out of harm’s way ensures that there is no loss of life.
  • Important papers and valuables should be kept in a waterproof safe, or in a waterproof place such as a safe deposit box.
  • Take an inventory of your assets. Photos and descriptions will help you estimate your losses if you are affected by a flood.

The real solution? Flood insurance. When homeowners examine their current policies they find that they must purchase separate coverage for flood-related incidents. Ultimately, the best solution is protection through a flood insurance policy. As homeowners insurance specialists, we understand the needs of our region- this is our home, too. Our goal is to help you assess what coverages you need, whether you have the right coverage in place, and to fill any gaps that exist in your homeowners policies. We know that expenses after a flood can cause high out-of-pocket expenditures, and we want to help you reduce your risk of loss. Whether you live in a high flood zone or one that is less at risk (incidentally, more than 20% of claims come from low to moderate risk areas), there are solutions.

Do You Need Flood Insurance in Arizona

Flood Insurance in ArizonaEven though Hurricane Sandy wreaked havoc on the East Coast, thousands of miles away from Arizona, anyone with a home in the state might be thinking about flood insurance. Well, here’s some good news.

According to The Arizona Republic article, “Reminder to review insurance,” insurance companies focus on “in-state hazards” when they set their prices, so Hurricane Sandy won’t have much effect on the cost of insurance in Arizona or other parts of the Southwest. Rates are set according to risks, and natural disasters in Arizona don’t include hurricanes.

In fact, homeowner-insurance costs in Arizona are moderate. The latest tally by Homeinsurance.com puts the average premium here at $617, compared with a U.S. average of $853. 

In addition to natural disasters, property values, building costs and other factors have an impact on the cost of insurance premiums.

Disasters like Sandy remind us that it’s smart to take time to make periodic reviews of our insurance coverage. Standard homeowner insurance policies cover damage and injuries caused by most natural disasters. However, floods are a notable exception.

Living in Arizona may make you wonder if flood insurance is a wise investment. Here are the facts:

  • Arizona has more flood-insurance policies in force than most states.
  • There have been five federal flood declarations in the state since 2000.
  • Winter storms, summer monsoons, and flash floods in wildfire-charred areas caused the floods.

Additionally, as stated the article “Should you get flood insurance?”:

If you live in a flood plain, FEMA makes sure you’re covered. Not so for far too many residents.

A flood plain by definition is dry most of the time, but it fills with water temporarily. Consider the Salt River basin, the area in which we live, its put residents at risk of flooding for thousands of years.

The federal government decides who is and is not eligible for flood insurance. You can check with your policy provider.

You may get some relief from flood damage through special government grants or loans, but only if a disaster is declared. Therefore, having coverage is helpful for covering damage from flash floods and heavy rains.

The National Flood Insurance Program is the main source of coverage for flood insurance. The NFIP site lists the names of local agents who sell policies. Premiums don’t vary by company.

If you decide that flood insurance is something you want to add to your policy, annual premiums are about $400 in low- to moderate-risk areas.

In the meantime, the State of Hawaii Department of Commerce and Consumer Affairs recommends the following steps for people in hurricane and/or flood zones :

  • Read your insurance policy carefully and talk to your insurance agent if you have questions
  • Consider whether you need more coverage or different types of coverage
  • Deal with licensed agents with companies licensed to do business in Arizona
  • Take inventory of your belongings and maintain a list in a safe place in your home as well as off site
  • Make sure you have sufficient provisions on hand such as canned goods, dried goods, and water (see the FEMA Handbook)
  • Take precautions to secure your home
  • Track storms through the media

Contact your insurance agent in Arizona to see what options they have to best insure your home against an Arizona Flood.