What is covered by a flood policy?
summary of commercial flood coverage. This document was prepared by FEMA to
help you understand your flood insurance policy through the National Flood
Insurance Program (NFIP). It provides general information about deductibles,
what is and is not covered by flood insurance, and how items are valued at
time of loss.
Flood Insurance Quick Facts:
losses are based on actual cash value
- Contents in a basement have
very limited coverage
- Business interruption and loss of income are
Example of a prior flood
loss: Dr. A has five practice buildings located in low to
moderate flood zones. Because the buildings were outside of high-risk
areas, Dr. A did not secure flood insurance. One of the buildings
experienced a flash flood, and the practice flooded with four feet of
water. Damage estimates for the contents and building are nearly $100,000,
which will be out-of-pocket expenses for Dr. A. Furthermore, because the
flash flood occurred in a small area, the governor did not request
federal disaster assistance so there were no low interest federal loans
available. After this loss, Dr. A secured a flood insurance quotation;
the average premium per location for building and contents coverage
(with limits ranging from $50,000 to $450,000) was $1,280 annually.
“I Have Insurance for Flood Damage” and Other Flood
Imagine that your practice sustained flood damage… One of your
first tasks is to find a debris removal service… Then you need to
replace your biologicals, your medical equipment, your flooring…
Thousands and thousands of dollars in expenses… Without a flood insurance
policy, all of your expenses are going to be out-of-pocket. Make sure
you review your need for flood coverage. Consider these five myths
about flood insurance. Challenge your preconceptions—protect your
Myth : I’m already covered because I have property
FACT: Only flood policies cover flood
damage—all business property policies specifically EXCLUDE flood damage.
This is a standard industry exclusion.
Myth: I don’t live in a
flood plain, so I don’t need a policy.
can be financially vulnerable to floods. People outside of high-risk
areas file more than 20% of NFIP claims and receive one-third of
disaster assistance for flooding.
Myth: A flood would only be a
FACT: 40% of all small businesses
that experience a flood fail to reopen. A closed practice means lost
revenue, and a flooded practice could mean tens of thousands of dollars
Myth: If there’s a really bad disaster, federal
assistance will pay for the damages.
disaster assistance typically comes in the form of a low interest loan
to help cover flood damage, not compensation for your losses. And,
the president must formally declare the event a disaster. Flood
insurance pays even if a disaster is not declared.
QUESTIONS? Need a Quote?
Contact the PLIT at 800-228-7548, option 4 to speak with one of
our insurance specialists who will answer your questions and help you
secure coverage for losses due to flood. There is a 30-day waiting
period on new flood policies so act now!