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Flood insurance – Don’t get soaked

March 12, 2015 – By Melissa Schall, CIC, Insurance Agent Wisconsin Medical Society Insurance & Financial Services

Floods are one of the most common natural hazards in the United States, but a standard homeowner’s policy does not cover damage to property and possessions that results from flooding. Because more roads, buildings and parking lots are being constructed where forests and meadows once stood, the Federal Emergency Management Agency (FEMA) says floods are becoming more severe throughout the country.

In fact, between 2008 and 2012 individual residential flood insurance claims averaged more than $38,000. When you consider that figure, this makes flood insurance all the more important.

A common misconception is that only residents in high-risk areas are eligible for flood insurance. In reality, most homeowners, business owners and renters can purchase flood insurance through the National Flood Insurance Program (NFIP). According to the NFIP, almost 25 percent of all flood insurance claims come from moderate- to low-risk areas. Just an inch of water can cause costly damage. Flooding can cause walls and entire structures to collapse and may result in a total loss.

Communities can choose to participate in the NFIP by agreeing to adopt and enforce certain floodplain management regulations such as building construction and zoning laws that minimize the risks of flood damage. If a community participates in the program, residents are eligible to purchase flood insurance, but they must do so through an authorized insurance agent.

In the event of a flood, many people believe that they will receive federal disaster assistance, but the president must first declare the area a major disaster before aid can be offered. Even then, the most common form of federal disaster assistance is a loan, which must be repaid with interest. Flood insurance claims are paid even if the president has not declared a disaster, and those insured are reimbursed for all covered costs.

Flood insurance typically has a 30-day waiting period, so homeowners need to be prepared for heavy rains or the spring thaw. Coverage for buildings and contents can be purchased separately, and homeowners in moderate- to low-risk areas may be eligible for Preferred Risk policies.

For more information or to receive a free quote, call Wisconsin Medical Society Insurance & Financial Services at 800.975.3418. Additional information also can be found here.

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