It can be defined as a budgetary tool used to protect property owners from water damage either to the structure and/or the contents in the property. All policies are regulated by the government although this insurance can be acquired from a wide range of insurance agencies. For this reason, there is a uniform cost in all the similar policies regardless of which company it’s bought from.
The policies are all accessible for homes and business properties. Homes financed by government-sponsored lenders need the insurance if they are in special flood hazard zones. Tenants can likewise acquire the cover for their property in a single family home, flat, apartment suite or commercial property.
Keeping in mind that the end goal is to help reduce the monetary impact brought about by flooding; Congress went ahead to make the National Flood Insurance Program (NFIP) in 1968. The NFIP, regulated by the Federal Emergency Management Agency (FEMA), empowers property owners, entrepreneurs, and leaseholders in engaging interest groups to acquire the government-backed insurance. This insurance cover is intended to give another option to disaster aid. This helps meet the rising expenses of repairing flood damage to structures and their contents.
One can acquire a flood insurance if;
• They own or live in a moderate or low-risk area and probably at a low cost.
• They own or live in flood high-risk areas (SFHA).
• Their mortgage company does not hold a requirement for this.
• Their home or business has previously experienced flooding.
Most insurance policies offer three types of coverage, offering different kinds of protection. These include;
Replacement cost coverage
This coverage repays you for the cost incurred in the replacement of your home. Substitution cost coverage is just accessible to proprietors of single-family, primary places that are safeguarded within 80 percent of the aggregate replacement cost.
This covers the items inside the homes; For instance, furniture, grills, clothes, microwaves etc. It covers items that belong to you and the family members that you live with. However, the policy does not cover items brought by friends or visitors, unless they are listed.
This protects the physical structure of a non-residential property or home. This covers foundation walls, anchorage systems, and staircases attached to the building etc.