First stop to get ready for flood is insurance agent
November 13, 2009 · 3:49 PM
By SETH TRUSCOTT
As wet winter weather — and the threat of floods — returns to the Northwest, insurance agents see a spike in the number of people seeking flood insurance.
Standard homeowner’s insurance doesn’t cover flooding, but coverage for flood disasters is provided by the federal government. Congress created the National Flood Insurance Program in 1968 to help business owners, homeowners and renters protect themselves.
“Anyone can buy it,” said Ashley Brinkley, an agent with Farmer’s Insurance in Kent.
Property owners can purchase a policy if their community agrees to adopt laws meeting federal requirements to reduce the risk of flooding. King County is the only participating community in the entire United States that has a 40 percent discount on flood insurance because of proactive efforts. City residents will see smaller discounts.
Federal flood insurance is the most affordable way for property owners to pick up the pieces after a disaster, said Angela Donaldson, agency producer at Hauglie Insurance in Fall City.
“The only other option is to pay out of pocket or request a loan for a disaster,” she said.
Federal loans and grants are less than ideal, Donaldson added. Grant amounts rarely cover much of the cost of cleanup, and federal loans can have higher interest rates than private banks.
Policies are purchased upfront, and there is a 30-day waiting period before they become active. Policies also come with deductibles.
Typical recent policies, as sold by Brinkley, include $30,000 in renter coverage for $130 per year, and $160,000 in home coverage for $296 per year. Flood coveage generally tops out at about $250,000. Costs are higher in the Snoqualmie Valley, with a typical Snoqualmie floodplain residence having an $800 premium.
Condominium owners can buy coverage, but creating a policy for them can be tricky, Brinkley said, if their condo association does not have a policy for the exterior of the building.
Property owners can write their own programs from the National Flood Insurance Program, or go through a local insurance agent. Agents receive a commission based on the number of policies they write.
“Flood (insurance) is meant to complement your existing homeowner, auto and umbrella policies,” Donaldson said. Standard insurance covers all perils except earth movement and flood. While the individual agents may differ, Donaldson said all policy language is the same because it is set by FEMA.
Coverage can be purchased for the contents of a home, for the structure, or both. Business structures and contents also can be covered. However, nothing outside the structure — for example, landscaping or driveways — can be covered under a flood policy.
Homeowners who buy in a floodplain will almost always be required to hold flood coverage by their mortgage holder, according to Brinkley.
Policy amounts depend on the risk of flood for a given property, based on where a home or business is located in the floodplain. The Federal Emergency Management Administration maps the floodplain. However, FEMA occasionally revises the floodplain map, meaning that premiums also change.
Interest in flood policies has been flooding in for Jerry Zelinsky, an agent with Farmer’s Insurance in Kent. Zelinsky quashed rumors about flood insurance currently making the rounds.
One rumor says that if the U.S. Army Corps of Engineers releases water from the Howard Hanson Dam, the flood isn’t natural and therefore isn’t covered.
“That doesn’t apply to FEMA policies,” Zelinsky said. While some private policies might not cover that event, federal programs will.
Zelinsky also reminds homeowners that contents policies only cover actual cash value. Belongings, such as televisions, may come under a depreciation schedule.
He advises homeowners to gather receipts ahead of time to make sure their belongings are covered.
“Start now, get an inventory,” he said. Property owners should collect receipts and old checkbooks to document the value of their goods.
“When it’s flooded, you’re going to be stressed out,” Zelinsky said. “Now is a good time to do that. When you buy things, make sure you keep receipts.”
Flood policy details change yearly, and it’s important for homeowners to stay up on those changes.
Donaldson advises homeowners to read their yearly flood declaration pages in their policies, which include changes.
“It’s really the homeowner’s responsibility to stay educated,” she said.
Preparing for the flood: What you can do now
• Keep all flood-claim-related receipts and records in a waterproof bag and away from the flood risk
• Take photos of your home or business as it is now
• Look into alternative storage options (raising or moving)
• Review your Flood Insurance Declaration Page
After the Flood: Surviving your flood claim
• Make sure your home is safe to enter
• Take photos (inside and out)
• File your flood claim with your agent. Ask if you can begin clean up immediately
• Separate undamaged from damaged items
• Keep inventory of all damaged items (age and value) regardless if they are covered
• Keep samples of carpets or other flooring removed from each room (3 feet by 3 feet)
• Keep estimates from contractors to show to your adjuster and provide copy of receipts from prior
• Keep receipts for everything. Supplemental claims require them.
Source: Hauglie Insurance