What Is Flood Insurance And What Does It Cover?

Flood insurance is different than homeowners insurance. Flood insurance is sold separately from homeowners insurance, and only protects you for losses caused by flood. Flood losses include prolonged rains, levee failures and, most importantly in the wave of IKE, storm surge. In Galveston and on the Bolivar Peninsula, it is expected that most homeowners insurers will argue that the losses were caused by storm surge rather than wind, and will attempt to shift all responsibility to flood insurers.

Flood insurance is government regulated and managed by the National Flood Insurance Program, or NFIP. FEMA operates the NFIP. Flood insurance is sold by private insurers, but backed by the federal government. Flood policies come in set packages of coverage. Residential coverage ranges up to $250,000 for the home and $100,000 for the contents. Commercial policies can cover up to $500,000 for the building and another $500,000 for contents.

Residents in a high risk area, such as a flood plain, would have purchased a standard policy, and in fact most mortgage lenders require these policies before approving loans on property in a flood plain or other high risk area. For residents outside of a high risk area, preferred risk policies are available at a lower cost.

There are some specific requirements for making a flood claim. Most importantly, YOU MUST FILE A SIGNED, SWORN PROOF OF LOSS WITHIN 60 DAYS OF THE FLOOD EVENT. The insurance adjuster should provide you with the right forms, but you must submit the signed proof of loss within the 60 days or you will lose your coverage. The proof of loss must include a detailed estimate to replace or repair the damaged property. After Katrina, the time limit to file the proof of loss was extended to one year. However, unless and until the government makes the same determination following Ike, you must be prepared to file this information with the 60 days.

More information on how to file a flood claim can be found at http://www.floodsmart.gov.

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