Did you know homeowner’s insurance excludes coverage for water damages caused by flooding? Purchase a flood insurance policy in addition to your home insurance could mean the difference between a minor setback and financial ruin. The fact is that flooding is the most frequent and most costly natural disaster in terms of damages. That is why private insurers do not offer primary coverage – it is just too costly. Instead, flood insurance is available to homeowners and renters through the National Flood Insurance Program (NFIP), and we here at Great Lakes Insurance can help you get the coverage you need.
Minnesota Flood Problems
When you think of flooding, you may think of heavy rains and flash floods. While torrential downpours are responsible for many floods, Minnesota is also prone to flood damages caused by another culprit – the spring thaw. When the land is still frozen, and the snow starts to melt, it can prevent water from being absorbed into the ground. This presents a potential threat for many Minnesota homeowners, including those who do not live in high-risk flood zones.
How Flood Insurance Pays Off
If groundwater sweeps into your home, expect a lengthy cleanup process and a big bill. There is the initial cost of disposing damaged drywall, flooring, furnishings, and belongings, as well as the cost of removing mold or mildew. Then there is the cost of rebuilding and restoring the inside of your home to its pre-flood condition. Add to that the cost of replacing your electronics, furniture, rugs, and other personal belongings, and it is easy to see why damages from just two inches of flood water can top out at $26,000 or more. The costs only rise in deeper flood waters.
Perhaps you live in a low or moderate-risk area, though. Is flood insurance a smart purchase for you? The answer is probably yes, as flooding threats nearly everyone. Even if you have never experienced flooding in your area, topographical changes that occur with land development can create new drainage problems that damage your home. Furthermore, there are rare, “hundred-year floods” that occasionally devastate unsuspecting communities that may have otherwise never flooded before. According to the Federal Emergency Management Agency (FEMA), approximately 1 in 4 flood claims come from people outside of high-risk areas.
Media often publicize FEMA grants after natural disasters. While federal emergency aid is sometimes available to flood victims, this only occurs under major disaster declarations. Even then, the money is generally allocated for clean-up and emergency living expenses – not the cost of rebuilding or repairing your home.
Understanding Minnesota Flood Insurance
Minnesota flood insurance generally has two different components. Homeowners benefit from both types of coverage, whereas renters may only need coverage for home contents. NFIP flood policies may include coverage for:
This coverage is designed to cover the structure of your home both inside and outside. It can help pay for your construction and clean-up costs after a covered flood. Generally, the maximum available NFIP flood coverage is capped at $250,000.
Home contents should not be overlooked when considering the cost of flood recovery. It only takes a few inches of water to destroy your floor lamps, couches, rugs, curtains, dining set, appliances, bedroom furniture, shoes, and more. Imagine replacing these items out-of-pocket. NFIP flood insurance protects these personal belongings up to a maximum of $100,000.
To qualify for NFIP coverage, your home must be located in a community that participates in the National Flood Insurance Program (most do). In some cases, lenders even require flood insurance to protect the value of your home until your mortgage is paid in full. Note that coverage costs vary according to your designated risks. However, many find the costs negligible compared to risk vulnerability and the potential savings in the event of a claim.
The National Flood Insurance Program implements a waiting period from the time of application approval until the time the policy becomes effective. This waiting period is usually 30 days, although you may qualify for immediate coverage when purchasing a new home or when your home is re-zoned into a higher risk flood designation.
Shopping for Minnesota Flood Insurance
Minnesota flood insurance cannot be purchased directly through the NFIP. Instead, you will need the help of an agent – preferably one that understands the unique risks of Minnesota residents. By choosing Great Lakes Insurance, you are working with an independent agency that can help you personalize your flood insurance protection and also offer recommendations and assistance if you need to expand your coverage with a supplemental policy.
Supplemental Flood Insurance
If you feel that the coverage in your NFIP policy is too low to meet your needs, additional coverage may be available from private insurers. Talk to your agent about supplemental flood insurance options and whether it could be right for you. At Great Lakes Insurance, we can help you explore supplemental policies that extend your coverage in the event you exhaust the limits of your NFIP coverage. We can shop and compare rates of supplemental flood insurance and help you better understand the way your policies protect you. We can also show you the ways your primary home insurance can be modified to cover other types of water damage in your home.
For more information about flood insurance and other water damage coverage options in the greater Cloquet area, contact Great Lakes Insurance to request a quote today. We look forward to serving you soon.