What You Should Know About Flood Insurance

When Hurricane Harvey struck Houston, reporters noted that it was hitting an area where about 80 percent of residents lacked flood insurance. The historic storm caused floodwaters to surge at 100-year highs, causing residents who never had to worry about flooding to do so. One in five new homes built in the Houston area within a year after Harvey were constructed in the 100-year floodplain. With these facts in mind, it’s easy to say that flood insurance has become as important to have as ever for residents of Houston.

Facts About Flood Insurance

According to the Federal Emergency Management Agency, flooding happens in every region of the United States. In fact, FEMA warns that 90% of natural disasters in the United States involve flooding. This means that getting flood insurance for your home might be one of the most important forms of coverage you’ll need in the future.

According to the Insurance Information Institute, the following flood insurance facts are important:

• Many homeowners and renters insurance policies do not cover flood insurance
• Most flood insurance policies are administered through the federal government. However, it’s still sold by private insurers.
• Flood insurance should cover physical losses caused by unexpected surges of water accompanied by a severe storm.
• There are two types of flood insurance coverages: insurance for structural damage and insurance for the contents of a home.
• Maximum flood insurance coverage for homes is $250,000 for structural damage and $100,000 for the contents of a home. Some private insurers offer “excess” coverage for homeowners and renters who desire more coverage.
• Commercial flood insurance has maximums of up to $500,000 for a building and $500,000 for its contents.
• Automobile insurance policies have optional flood protection coverages drivers can select for their vehicles.

About the National Flood Insurance Program (NFIP)

The NFIP was created over 50 years ago. It was created by the federal government in the interests of “protecting people in the United States against the perils of flood damage. It was created as an insurance alternative to disaster assistance to address the rising costs of repair damaged buildings. The program allows residents of a community to purchase coverage if that community meets specific requirements.

Are Settlements from An NFIP Policy Always Fair?

Many people assume that settlement offers from an NFIP policy are fair because the program is administered by the federal government. However, this is not always true. One significant criticism of the NFIP is the fact that FEMA allows many private insurance companies to handle policies for it. When a natural disaster occurs, FEMA pays the insurance companies to offset their costs. Notably, there is little oversight to this process and private insurers have been known to use FEMA payments to fight insurance claims in court. In other words, some companies and law firms use federal money to fight policyholders and turn a profit. During one case, one insurance company paid $29 million to fight NFIP policyholder claims.

If you’re making a claim for flood damage and are not being treated correctly, call Arnold & Itkin today. Our Hurricane Harvey attorneys have helped clients recover billions of dollars. We know the tactics that insurance companies use, and we’re ready to fight them. Our team never settles for less than a client deserves, and we refuse to back down for them because we know how much is at stake.