October 2, 2009

Inside Insurance: Flood insurance changes

There is a saying among Georgia’s county flood plain managers that is important for the public to understand and consider: The question is, who lives in a flood plain?

We all do.

The only difference is the percentage chance of your property being flooded. That was plainly evident in the late September flooding that surprised many across Georgia and in other Southern states.

Just a few of the most notable incidents that gave us all pause included:

• At least 10 deaths attributed to the floods.

• The high percentage of those whose homes were not covered by a flood insurance policy.

• The washout of numerous road bridges that snarled traffic in many counties.

• The number of motorists whose vehicles flooded in place at the owners’ homes or those that flooded on the roadways.

Worse, many of those individuals did not have the optional coverage known as “comprehensive” that would offer financial protection for damage or if the vehicle was totaled. Due to the economy, many motorists have reduced their auto coverages to eliminate many options after loss of jobs or other economic circumstances.

Flood insurance is not part of a homeowner’s insurance policy. The only financial protection one has against flooding is to obtain flood insurance either through your insurance carrier or directly from the NFIP. This message, repeated often by insurers, disaster response organizations and the federal and state governments, is one of the most misunderstood issues within the housing industry.

Renters who live in flood-prone areas as well as homeowners and business owners should be well informed about flood insurance protection. Renters should understand that they are only covering their contents and not the physical unit.

Vitally important is the fact that one does not have to live inside a designated flood plain to obtain flood insurance. This detail is supported by the fact that between 25 percent and 35 percent of flooding in the U.S. occurs outside designated flood plains, according to county flood plain managers.

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