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Flood Insurance: Understanding Your Options

Flooding is the most common disaster in the United States and yet so few property owners are covered by flood insurance.

There is hope however, with more and more options for coverage thanks to both private insurers and the federal government. This is a result of both private and public entities developing updated techniques to measure a property’s flood risk.

What Options Exist?

You have two main options when deciding what best fits you and your property’s needs when it comes to flood insurance. For homeowners, the most common and well known option is NFIP (National Flood Insurance Program). They are responsible for 95% of the nation’s flood insurance policies of private residences and cannot turn down a potential policy holder for any reason, making them the more “public” option. On the other hand, the private sector has become more popular among commercial property owners, but this still only makes up for less than half of policies in the US.

While more property owners are becoming aware of the risk of potential flooding and how damaging this can be, there are more options available for coverage: either an ISO Form Policy or a NFIP Policy. But which is best for you? Here are some important factors to consider when deciding:

NFIP offers three types of programs:

  • A Dwelling Form (coverage on a primary residence)
  • A Residential Condominium Building Association Property Form (coverage for the unites, condominium association as well as personal property inside said units)
  • A General Property Form (coverage for both commercial, personal and residential properties)

An important detail to note about NFIP policies is that in order for a flood to be covered, the conditions of the flood would have to also affect at least two properties or a two-acre area around your property. In other words, if only your property is flooded, you will not be covered.

ISO Form Policy

Your other option is a private policy based on a form by the Insurance Services Office (ISO). The types of coverage and policies are not as cut and dry as with an NFIP policy because the private sector is made up of many different companies who offer different kinds of policies. One way that these two coverage solutions differ is an ISO policy does not hold the same caveat as an NFIP policy: if your property floods, you are covered regardless if your neighbor’s property floods. This is mainly due to the new techniques that have been mastered to determine flood mapping.

There are also some bonuses with an ISO policy that an NFIP policy does not cover:

  • For commercial property policies, coverage is provided for loss of income as well as extra costs.
  • For personal properties, coverage is provided for loss of use of the property.

Floods can happen anywhere at anytime and your best option is to get covered for the most common natural disaster in the United States.

We’re Here to Help

Need help navigating your flood insurance claim? At Stark Loss, we’re here to help. We’re experts when it comes to understanding the intricacies of your policy and have settled thousands of claims for every type of disaster. Contact us today to learn more.

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