Flood Insurance In The Wake of Hurricane Sandy

First off, my heart goes out to people in the northeast area who are affected by the Hurricane Sandy. It is very disheartning to see the daily lives of millions of people disrupted by a storm. I have gone through multiple hurricanes and tropical storms myself when I was living in Florida between 2001 and 2006. Hurricanes like these put new perspective on the meaning of life, including, protecting ourselves and our loved ones from a catastrophe like this. This incident has caused me to question my own insurance coverage.

Standard home insurance policies DO NOT cover flood damage. You need to purchase a completely separate, additional policy to cover flood damage. If you own a home in a low-lying area that is prone to flooding, then you may want to consider getting a flood insurance policy. Some lenders may also require flood insurance policies under the terms of your loan.

The flood insurance policies are offered through a federal program called National Flood Insurance Program (NFIP). The flood insurance policies are sold by insurance companies, but are underwritten by NFIP. If you decide you need flood protection, then contact your insurer right away as there is typically a 30 day waiting period before the policy covers you.

Before you get a flood policy, you may want to understand the flood map of the area where your property resides. The official site of NFIP, floodsmart.gov has a form where you can provide your property's address and it will tell you the risk profile of your property. In my own case, my house has a moderate-to-low risk profile. According to floodsmart.gov website, 20% of the claims are from properties that have moderate-to-low profile. So, floods aren't just common in high risk profile areas. Also, all 50 states experience flood of one kind or another.

Apparently, flood insurance policies are not that expensive if you live in a moderate-to-low risk profile area. It starts from $129 per year, but for decent sized house, I am imagining about $400-600/year. I will have an accurate understanding about my own properties estimates when I speak with my insurance company.

In case of flood damage, first and foremost, make sure your family has a safe shelter. As soon as you possibly can, contact your insurer and start the claim process. If you can access your property, then take pictures of your property for flood damage, including your belongings. If minor repairs can prevent further damage to the property, then you may want to do those and save your receipts. But, hold off from making major repairs yourself as you would need to go through claims adjuster and ultimately the insurance will decide how they want to deal with the claim.

In summary, our planet is going to experience more and more hurricanes, floods, and severe weather patterns due to climate change (if you believe in global warming). Therefore, it will be crucial to maintain adequate insurance coverage to protect yourself from the financial catastrophe.