New Flood Insurance Policy Provides up to $15 Million in Coverage
Think your flood insurance coverage is a little wimpy? You might be right—especially when compared to the new Personal Flood Insurance that's been rolled out by the Chubb Group of Insurance Companies.
The new Chubb policy can provide up to $15 million in property coverage—a stark contrast to the National Flood Insurance Program's (NFIP) flood coverage, which offers a maximum of $250,000 for homes and $100,000 for contents. Chubb Personal Flood Insurance also pays the replacement costs to repair or rebuild your home and replace its contents, up to the limits you select. The NFIP typically settles claims on a cash value basis, which means that the NFIP considers the depreciation in value of your house and contents when they pay out your flood insurance claim.
The coverage itself is also far more extensive under the new Chubb policy, including:
- surface water run-off from a paved surface into the home
- overflow or backup from a sewer outside the home
- flood water entering the home from basement windows
Quite simply, because the Chubb Group has defined "flood" more broadly, homeowners are better protected from numerous water-related perils and the costs to repair or replace their property.
But what if you don't live in a designated flood zone? Do you still need flood insurance?
The answer here is an unequivocal yes, unless, say, you live in the middle of the Sahara. And even then, you're still at some risk for flood damage.
According to the Federal Emergency Management Agency (FEMA), flooding causes more than $2 billion in property damage in the U.S. each year. The common misconception about the necessity of flood insurance is strongly demonstrated by a recent Chubb Group survey, which found that almost 40 percent of Americans believe only homeowners near bodies of water need flood insurance. Au contraire, says Chubb & Son VP, Peter Spicer:
After last year's record-breaking hurricane season, many [homeowners] associate flooding with rooftop rescues and widespread destruction. The reality for the many Americans who experience flooding is much less dramatic, but it's still potentially very costly and disruptive to their lives.
The bottom line is that every home is at some risk for flood, whether it's from an overflowing body of water or a plumbing problem. And with more options for flood insurance, finding an affordable flood insurance policy just got easier.
[HELPFUL LINKS]:
The Insurance Information Institute
FloodSmart
FEMA/NFIP
