Misconceptions About Flood Insurance


5 min read ยท Nov 5, 2021

In the United States, flooding is among the most prevalent natural disasters. Purchasing flood insurance can bring peace of mind and protection. When it pertains to flood insurance, there are various misconceptions about flood insurance to avoid. With storms and floods on the horizon, Neptune Flood needs you to be informed on some common flood insurance misconceptions about insuring your house and possessions. Flooding may be costly even in the absence of a hurricane, so it is wise to educate yourself first.

If your house is flooded for whatever reason, you would not want to commit the blunder of not getting enough insurance. Being knowledgeable and prepared for floods may help you save money, time, and stress in the long haul.

1. Misconception: Homeowners insurance includes flood damage.

Damage from water leakage, a leak in the roofing, or leaking pipes is typically covered by a standard house insurance policy. Flooding is NOT included. The distinction is that flooding water is deemed “high water,” which is not comparable to what is insured under water damage. Additional flood insurance is required to safeguard your house and possessions in the case of flooding caused by a storm surge or heavy rainfall.

2. Misconception: The NFIP is the sole location to get flood insurance.

The NFIP is not the only resource for flood insurance. You can also be insured by a private carrier. Neptune Flood is an independent carrier that provides certified flood endorsements to assure complete coverage. The NFIP does not cover swimming pools, mold damage, temporary housing, or hot tubs, but we can with additional optional coverages.

3. Misconception: Homeowners are the only ones who can get flood insurance.

To be eligible for flood insurance coverage, you do not have to possess a single-family house. Renters who wish to secure their personal goods can get flood insurance. Commercial building owners who wish to safeguard the building and contents of their enterprises can also get flood insurance.

4. Misconception: I should defer buying flood insurance until the rainy season.

Some individuals may not consider flood insurance until water levels start to rise and endanger their location, but it’s best to react proactively when it pertains to getting flood insurance coverage. This is because, in most situations, there is a waiting period before the flood insurance policy takes effect, and even a moratorium when a storm warning is issued. Consider purchasing flood insurance while the weather is dry so that it would be accessible if you encounter flood damages in the future.

5. Misconception: Flood damage will be covered by federal disaster assistance.

Flood victims may be eligible for federal disaster assistance in some situations. Nevertheless, it’s good to know how this works. Federal disaster relief funding is only available if a disaster has been declared – yet less than 50% of floods are proclaimed federal disasters. When a disaster is announced, the average federal disaster assistance payout is around $5,000. Typically, this takes the shape of low-interest loans that may need to be repaid.

Alternatively, flood insurance often gives substantially higher coverage, and the funds received by policyholders from accepted claims are not required to be repaid.

6. Misconception: Only those who reside in a flooded area require high-risk flood insurance.

In reality, flooding occurs in all 50 U.S. states and has been the most prevalent sort of natural catastrophe. Flooding should be on everyone’s radar across the country. In actuality, one-third of flood aid goes to those who live outside of high-risk flood-prone areas. The FEMA website includes those in high-risk zones, but, as FloodSmart points out, if you live outside of those locations, you may need supplemental flood insurance.

Keep in mind that it just takes an inch of floodwater to cause expensive damage. View this graphic to discover where flooding claims have been filed in the United States. Fall and spring storms and severe rainfall in the heart of the nation have all produced serious issues.

7. Misconception: Flood insurance always compensates for the full amount of damage.

Flood plans, like other forms of insurance, have restrictions. A conventional flood insurance plan covers up to $250,000 in property protection for a single-family house or condo, as well as $100,000 in personal possessions coverage. A commercial flood insurance plan typically provides close to $500,000 in protection for the structure as well as close to $500,000 in protection for the business’s goods. Neptune Flood insurance plan covers up to $4,000,000 in property protection and up to $500,000 in contents coverage for both residential and commercial insurance products.

8. Misconception: If your building has ever been flooded, you cannot get flood insurance.

If your house, condo, apartment, or company has been flooded, you may still get flood insurance as long as your town participates in the NFIP.

9. Misconception: Floods are only caused by storms.

Flooding can occur as a result of dam failure or a differential in water movement below and above ground. Flooding caused by melting snow is one example. As per FEMA, no building is fully protected from possible flooding damage. Even if your property is not in a high-prone flood zone, your mortgage provider may demand it.

Final Words on Flood Insurance

When it pertains to coping with possible flood damage, knowledge and preparedness are essential. You can be better prepared in the case of a flood if you know how flood insurance operates and how you might benefit from it.

The NFIP may not cover the particular shed you put in the rear of your house. This and any such unattached structures may not be covered. If your house is flooded, your temporary living expenditures are critical; this is a strong reason to obtain coverage for this additional expense that Neptune offers.

At Neptune Flood we want you to be equipped, so we provide policies that protect more of your possessions with additional optional including replacement expense, temporary living costs, basement contents, swimming repair/refill, and detached structures. With a ten-day waiting period compared to the NFIP’s 30-day waiting period, Neptune can protect your property up to three weeks faster. Our technology has the potential to save you a lot of money, another reason to check out our plans for your house and business if flooding strikes.

Original article published October 2018. Updated content and references November 2021.