HELPFUL FACTS ABOUT FLOOD INSURNACE
By Vic Lefeve

According to the Federal Emergency Management Agency, which manages the National Flood Insurance Plan, at least 25% of all flood claims occur in areas that are not designated as flood zones.

When purchasing a flood insurance policy, you can elect coverage on your home or building on a replacement cost basis that will cover the cost of flood damage without a reduction for any physical depreciation. To be eligible for replacement cost coverage, the following conditions must me met.

1. The building must be a single-family dwelling.
2. The building must be your principal residence.
3. The building coverage must be at least 80% of the full replacement value
   of the building, or the maximum flood insurance coverage available for
   the property.

If any of these conditions are not met, coverage will only be available on an actual cash value basis that will provide replacement cost value less the value of any physical depreciation. It should be noted that carpeting is always adjusted as an actual cash value basis, along with any personal property items that are covered under your flood insurance policy.

Items specifically excluded under a flood insurance policy, whether it be a building or personal property, are decks, fences, hot tubs, swimming pools, currency, valuable papers, etc. Review your flood insurance policy for a complete list of excluded property.

Damages caused by sewer backup are covered under a flood insurance policy if the backup is a direct result of flooding. If sewer backup is caused by some other problem, coverage may be provided under your Homeowners Insurance Policy. Check your Homeowners policy to determine if sewer backup coverage, other than flooding, is provided.

These situations were major issues after Hurricanes Katrina and Rita, and it is important to understand the coverage provided under your Flood Insurance policy, so that you are better prepared in the event flooding causes damage to your property.

Victor J. Lefeve, CPCU, CIC, CPIA is President of Employees Insurance Representatives, Inc., a local independent insurance agent.