Molly McVetyDelaware News Journal
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In the aftermath of two devastating hurricanes ravaging America’s South, final counts of damage and death rolls are still being reconciled.
As USA TODAY reported, the hurricanes and storm surge and water damage that it brought are highlighting a major nationwide threat to the safety of homes and businesses – a lack of flood insurance.
Even if you don’t live in an area at a high risk for flooding, insuring your home from flooding and water damage is still recommended by experts. The Federal Emergency Management Agency estimates that just 1 inch of water damage in your home can cost upward of $25,000 to repair out of pocket.
So, how does flood insurance work and what are some of the common misconceptions about its policies?
Here’s what to know.
What is flood insurance?
Flood insurance is regulated by the federal government’s National Flood Insurance Policy program, but can be purchased through private insurance companies as well.
Other forms of federal assistance are available only after a presidential disaster declaration. This assistance is usually given out in the form of a loan to be paid back with interest and may not be enough to cover substantial damage to your property.
In the event of a covered flood event, homeowners and renters can receive compensation up to $250,000 for damage to your home. According to the Federal Emergency Management Agency, a flooding event is defined as the “inundation of two or more acres, or two or more properties that are usually dry, by inland or tidal water runoff.”
This definition also includes damage caused by mudslides or the collapse of land along a body of water due to erosion.
Certain areas considered to be at high risk for flooding may be required to purchase flood insurance, especially if the owner has a government-backed mortgage.
Renters are able to purchase flood insurance as well, but only for their belongings. These types of policies through the NFIP can cover up to $100,000 worth of damage to belongings like clothing, furniture, electronics, kitchenware and more.
Premiums for flood insurance typically are calculated based on the average flood frequency of the area, distance to water source, elevation and more.
According to Moneygeek, the average flood insurance premium cost in Delaware is around $748 annually, which is slightly less than the $768 national average.
Common misconceptions
There are certain common misconceptions that are held relating to how flood insurance works, including whether or not people have it.
Is flood insurance included in homeowners' insurance?
According to Delaware Insurance Commissioner Trinidad Navarro, flood insurance is not included in standard home insurance policies. So, if you think your home has protection against flooding events, you likely don’t.
“Many people in Delaware think that their homeowner’s insurance will cover a flood … people don’t realize until it’s too late,” Navarro said. “In Delaware, we are aware of several companies who have written private flood coverage … but very few people actually have it here in Delaware.”
Navarro also stressed the importance of reading the fine print of your policies. Depending on the policy you sign up for, certain types of water damage like mildew or mold damage may not be covered.
“When we had flooding in Wilmington a few years ago, people had flood insurance, but they didn’t realize that part of the policy stated that you couldn’t have valuables on the first floor of the property,” Navarro said. “It varies by policy, but terms like that are common.”
One important caveat to consider is that flood insurance does not become effective until about 30 days after it is purchased.
Do I need flood insurance if I don't live near a floodplain?
While it may be required for certain areas, it’s still recommended that homeowners further from floodplains purchase flood insurance – these areas may even be cheaper, and in this case, it's better safe than sorry. As Navarro put it, “If you live in an area that rains, you live in an area that can flood.”
According to FEMA, nearly a quarter of all flood insurance claims come from policyholders outside of “high-risk” areas. That being said, according to the University of Delaware’s Water Resource Center, there are more than 18,000 structures in Delaware within the 100-year floodplain, a majority of which are in Sussex County.
NFIP flood insurance is not available in certain protected areas, such as Coastal Barrier Resources Act Zones. In Delaware, this includes areas near Little Creek, Broadkill Beach, Cape Henlopen and Fenwick Island.
What does flood insurance cover?
Another misconception about flood insurance is what events it covers. Certain temporary flooding events are usually covered under flood insurance, but gradual shifts in climate patterns like sea level rise are not.
For example, if a basement is flooded during a sunny-day flood (usually caused by high tides), it likely is not covered by flood insurance. Similarly, a sewer backup or a busted pipe that causes flooding would more likely be covered by homeowners’ insurance policy, not flood insurance.
However, a covered flood event is not only from major storms. Incidents like heavy sewage flows or runoff would likely be considered covered events.
To navigate what types of damage constitute a covered flood event, Navarro recommends it’s best to talk with an insurance agent or broker who can point you in the right direction according to your property.
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Recommendations and advice
To get started, contact an insurance company or agent who is qualified to file a policy with NFIP.
As the lowest-lying state in the country, Delaware is at a particular risk for flooding issues. I-ADAPT, a new flood planning tool, was released this year by the Department of Natural Resources and Environmental Control, and that helps homeowners and residents create a plan for a potential future flood emergency.
“When users open the tool, they will be prompted to identify their structure and go through questions aimed at understanding the physical characteristics of the property,” said Jordana Cutajar, a resilience planner with the DNREC Division of Climate, Coastal and Energy. “The tool uses logic to determine which questions are suitable based on the information given and provides personalized adaptation strategies that can be implemented right now and in the future to reduce the property’s flood risk through 2050.”
The survey takes around 15 to 20 minutes to complete and pulls from about 90 different adaption strategies to choose the best plan for your home.
The Delaware Flood Planning Tool is a separate database available to Delaware residents which informs users whether their property is considered at risk of flooding and if it is within FEMA’s 100-year floodplain.
Navarro’s recommendation to Delaware residents, both owners and renters, is to reach out to a flood insurance agency and inquire about what makes the most sense for your property and any outstanding questions you have about the process itself.
“I would start with a local agent, somebody who understands how the policies work and their limits,” Navarro said. “It’s critically important to have these candid conversations with an agent or broker, someone who can explain what you can do to protect yourself.”
In general, if a storm is coming that may bring flooding or related water damage, it’s recommended to elevate appliances, utility equipment and personal belongings.
According to DNREC, for homes that are required to purchase flood insurance, steps such as filling in basement cracks with dirt or sand may help reduce your premiums.
Molly McVety covers community and environmental issues around Delaware. Contact her atmmcvety@delawareonline.com. Follow her on Twitter@mollymcvety.