Why Many Property Owners Don’t Have Flood Insurance (and Why They Need It)

Many property owners assume that their property is already insured against flooding, when the reverse is often true. Flood insurance often comes as a separate insurance policy, and affordable flood insurance is a virtual necessity for property owners who want to protect their homes or businesses.

As an insurance agent, it’s important to understand why some of your clients may not have this insurance coverage, even if they live in a high-risk area. Here are some of the most common reasons why property owners forego flood insurance coverage.

Not Understanding the Difference Between Flood Insurance and “Water Damage”?

Nearly every property insurance policy covers water damage, but water damage isn’t the same as “flooding.” Water damage refers to issues such as burst pipes, not natural disasters such as floods. If your neighbor drains their pool into your yard and your basement “floods,” it’s water damage. If high levels of rain cause your basement to flood, it’s flood damage. This is an easy mistake to make, but there is a distinction between the two, and failing to understand this distinction is a common cause of insufficient coverage.

When a hurricane or storm strikes, flooding damage is extremely common. Any property in a high-risk area needs protection.

Thinking Flood Insurance Isn’t Really Necessary

Flood damage is extremely expensive. When water gets into a home, it isn’t clean water. The entire building often needs to be professionally cleaned out. There’s often damage to flooring, drywall, and even the structure of the building. Furniture, electronics, and clothing will often be lost. Flood can later lead to issues such as mold, causing problems for the building’s occupants long after the flooding has subsided.

If you want to assess your risk, there’s an easy way to do so: your flood zone rating. Every property has a rating that denotes whether the property may be at high risk of flooding. Property owners can search for their address on the FEMA website. If you’re in a moderate to high risk area in terms of flooding, it may only be a matter of time before flooding hits.

It’s also possible that property owners may be required to have flood insurance. If you have a mortgage, your mortgage lender may require you to have flood insurance. Make sure that your clients are aware of this.

Not Knowing How to Get Flood Insurance

Flood insurance is just like any other insurance policy. The policy will be based on the amount of coverage needed, and you can provide a policy that’s adjusted to your client’s personal needs and level of risk

The best time to buy a flood insurance policy is when you realize that you don’t have one. Many property owners don’t think about it until the flooding is imminent, but at that point it’s already too late. If you buy a flood insurance policy just before a major weather event is about to occur, it’s likely that you aren’t going to be covered for any claims incurred during the incoming hurricane or storm.

About Wilmington Insurance Agency

Wilmington Insurance Agency delivers comprehensive coastal property solutions. We are a Managing General Agency and provide independent insurance agents with property and liability insurance solutions for residents and businesses primarily in Maryland and Virginia. We work alongside our sister company, Wilmington Insurance Company, established in 1996 and providing Property & Casualty commercial lines business, homeowners, and condominium insurance in the state of Delaware. To learn more about how we can help you to expand your book of business in the coastal market, contact us at (302) 231-2800.