Most homeowners have some form of insurance that protects their houses from damage and loss. But standard home insurance may not provide the necessary coverage for properties situated in flood-prone areas. For instance, in New York City, many property owners need New York excess flood insurance on top of their existing insurance policies.
Unfortunately, most homeowners neglect getting flood insurance until a major calamity strikes. By then, of course, it is already too late.
How Hurricane Sandy affected New York City residents
This was the case in the aftermath of Hurricane Sandy in 2012, which caught many New Yorkers off-guard. Dozens of homeowners realized that the home insurance they had been counting on to protect their properties did not cover the damage caused by the subsequent flood. Because they did not have the appropriate coverage, many homeowners experienced devastating losses.
As tragic as the consequences were, neglecting to get flood insurance is a common mistake. Many New Yorkers place all their trust in standard home insurance plans, without realizing that they don’t cover all natural disasters. For instance, most home insurance only covers tornado or lightning damage. Those who needed flood damage coverage were unfortunately out of luck. .
The fact that so many home insurance plans exclude flood damage is unfortunate. Apart from the immediate damage and inconvenience, floods could also cause mold infestation, foundational damage, and many more issues. Some of these could occur over the long-term, taking several years before their effects become apparent.
Of course, floods can result in loss of property as well. They can render homes unlivable, and even cause the loss or damage of household items and personal possessions. Without the protection provided by a flood insurance policy, the financial toll of a flood can be devastating.
Why flood insurance is necessary
Perhaps the most compelling reason to purchase flood insurance is the combined cost of loss and damages. Even if you are able to repair the areas of your property that floodwaters damaged, the financial toll can be considerable. According to FEMA estimates, average repair costs can be as much as $25,000 even if the waters rise only an inch high.
Of course, some floods are considerably worse, resulting in much higher costs for repair. A study conducted on the effects of Hurricane Sandy on New York City revealed that the cost of damages totaled over $19 billion. Years after the catastrophe, many homeowners are still in dire financial straits.
To its credit, the city and state of New York did implement several storm protection measures since then. Although this is undeniably a welcome development, the bad news is that even these strategies may not be enough.
Scientists expect hurricanes and tropical storms to become stronger and more frequent over the next several years, mainly because of climate change. Even now, more and more states are at increased risk for floods, which makes it imperative to obtain flood insurance if you are a homeowner.
Purchasing flood insurance
The process of purchasing flood insurance is similar to getting any other type of home insurance. However, flood coverage usually entails getting a separate policy that will be added to your existing home insurance plan.
It is advisable to get a National Flood Insurance Program (NFIP) policy, which is available through many insurers. However, keep in mind that NFIP policies are offered only in some communities. You can find out if your home qualifies for this policy by checking with FEMA.
It is also advisable to determine your level of risk by knowing what flood zone your property is located in. Your insurance agent should be able to give you the pertinent information, but it is a good idea to do your own research so you can look around for the best rates.
After you get a flood insurance policy, find out the extent of coverage it provides. For example, building policies typically cover damage to the structure but not to appliances, furniture, clothing, or other personal items. If necessary, you may have to get a separate policy to ensure that your home’s contents are covered as well.
When should you buy flood insurance?
The time to act is now. If you haven’t purchased flood insurance yet and there is an impending storm, chances are you won’t be able to benefit from the policy at all. Remember, most insurance policies take effect thirty days after approval. So make sure you have plenty of time to prepare for hurricane season by applying for flood insurance today!
About Snyder Specialty
Snyder Specialty, LLC is a New York-based underwriting facility that provides a range of property and liability solutions for personal and commercial lines. Specializing in coastal properties and hard-to-place risks, Snyder Specialty expands your current capabilities with proven solutions for complex risks. Find out more about the company’s range of services by calling (718) 362-8039.
