You DON'T have to live in a flood plain to get flood insurance!
The Insurance Industry in Minnesota is poised to help home and business owners who may be affected by the prospect of flooding this spring, but it is very important to take action NOW before the flooding strikes.
Expert hydrologists have forecast a strong likelihood of flooding particularly because of the deep snowpack in flood-prone areas in Minnesota.
Flood insurance is widely available in Minnesota, but the coverage available through the National Flood Insurance Program, carries a 30-day waiting period between the time the coverage is purchased and the time it becomes effective.
"The waiting period makes it essential that home and business owners talk to their insurance agent right away to discuss their flood risks," said Insurance Federation of Minnesota President Bob Johnson. "While there is still time to make sure you are adequately covered, it is important to act quickly."
Most homeowners' insurance policies don't normally cover flood damage, but flood insurance is available to nearly all Minnesotans through the NFIP, administered by the Federal Emergency Management Agency. Even though FEMA administers the program, the policies are sold and serviced by insurance agents and many insurance companies.
For vehicle owners, flood damage is covered if they've purchased comprehensive coverage on their vehicles from their auto insurance carrier.
"There are many misconceptions about insurance coverage and flooding," said Insurance Federation of Minnesota President Bob Johnson. "The biggest misconception is that you can't get flood insurance unless you live in a flood plain, but that's not true."
For homeowners, the only requirement to buy flood insurance is that your municipality participate in the NFIP. Almost 85 percent of Minnesota cities, towns, counties and townships participate in the NFIP.
Federally regulated mortgage lenders require flood insurance for homeowners with loans who live in the areas most prone to flooding. But even if such coverage is not required by your lender, getting flood insurance may be prudent, even if you don't live in a flood plain. FEMA says 25 percent of all flood claims come from homes located outside designated flood plains.
"Unfortunately many homeowners don't buy such coverage because they think it is too expensive," said Johnson. "Anybody buying property insurance for their home or business should ask their agent or broker about the cost of flood coverage. It many cases it is surprisingly affordable, considering what's at stake."
Many homeowners insurers do cover water damage from the backup of sewers or drains if the homeowner carries an additional 'rider' on their policy. This optional coverage also pays if a sump pump fails or is not working due to a power outage. The "backup of sewer and drain endorsement" is surprisingly inexpensive, typically costing under $50 per year.
Auto owners do have coverage for flood damage to their vehicles under their comprehensive auto insurance coverage, if they've purchased it. While comprehensive coverage is not required under the state's mandatory auto insurance coverage, many lenders require borrowers to carry comprehensive coverage.
Some commercial insurance policies also have provisions that pay for flood damage if the business owner buys such coverage. A commercial insurance agent or broker can help determine the right amount of coverage needed. The NFIP also has flood coverage available for business owners.
For more information about Minnesota communities that participate in the National Flood Insurance Program, visit the IFM Web site at: www.insurancefederation.org.