Do I Really Need Flood Insurance?

Jun 14, 2022

Flood Season is Coming

Are you protecting your business and inventory from Flood? Your property insurance does not cover flood damage; you must buy a separate flood policy.

Why do I need Flood Insurance?

  • Flood damage is expensive. The average commercial flood claim is $90,000.
  • Flood damage is NOT covered by your property insurance policy.
  • Flooding is a risk for any business, regardless of location. Most of the damage from recent storms occurred outside of "high risk" flood zones. When Hurricane Harvey hit Houston, 70% of the flood claims were at locations not required to carry flood insurance.
  • Wherever it rains, it can flood.

Do I have to think about Flood Insurance now?

Flood zone designation is not permanent. Recent FEMA's study on property and surrounding areas determine that the flood risk has changes. What used to be a low or moderate-risk area may be a high-risk zone that require flood insurance. Use the FEMA Flood Map to find your property's flood map.

As home values fluctuate and the cost of constructions continue to rise, it is worth reviewing flood coverage. The supply chain disruption and labor shortages have driven up the price tag of home repairs. Your current policy coverage may not be enough to return a flood damaged home to its former condition. <

What Flood Zone am I in?

There are many flood zone designations which break out into different categories:

Moderate to Low-risk Sone: B, C or X
Flood insurance is not required by lenders in these areas, but according to FEMA, about 30% of all NFIP claims comes from outside of high-risk zone.
High Risk Zone: A or V
These zones have a 1% annual chance of flooding and 26% over the life of a 30-year mortgage. Flood insurance is mandatory in these zone if there is a federally backed loan on the property.

What does Flood Insurance help cover?

Building Coverage

  • Electrical and plumbing systems
  • Furnaces and water heaters
  • Refrigerators, cooking stoves, and built-in appliances like dishwashers
  • Permanently installed carpeting
  • Permanently installed cabinets, paneling and bookcases
  • Window blinds
  • Foundation walls, anchorage systems and staircases
  • Detached garages
  • Fuel tanks, well water tanks and pumps, and solar energy equipment

Contents Coverage

  • Personal belongings such as clothing, furniture and electronic equipment
  • Curtain
  • Water and dryer
  • Portable and window air conditioners
  • Microwave oven
  • Carpets not including in building coverage (for example - carpet installed over wood floors)
  • Valuable items such as original artwork and furs

Things to Know

Do you have a SBA Loan? The SBA now accepts private flood insurance to satisfy their flood insurance requirement.

Are you only renting or leasing commercial space? You can buy a Contents Only coverage, or also protect the building by adding the owner as additional insured.