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Peoples Choice Insurance Blog: homeowners insurance long island

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I already have homeowners insurance.
Most homeowners insurance does not cover floods. It does, however, cover fires. Now consider this: in a high-risk area, your home is more than twice as likely to be damaged by a flood than by fire.

Floods? That's what disaster assistance is for.
Available only when the President declares a disaster, Federal disaster assistance is usually a loan that you must pay back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 per year) for 30 years, in addition to your mortgage loan that you still owe on the damaged property. Plus you would need to buy and maintain flood insurance for the life of the loan.

Compare that to the average premium for flood insurance coverage, which is about $600 a year (and even less outside of high risk zones). Plus, when you submit a flood insurance claim, you are compensated for all covered losses whether or not a disaster has been declared - and you do not have to pay it back.

I live on a hill and am not at risk.
If you live on a hill or in an area that has never been flooded, your risk may be significantly reduced, but it is not eliminated. Aside from major storms like hurricanes and tropical storms, flooding can be caused by heavy rains, melting snow, inadequate or clogged drainage systems, and failed protective devices such as levees and dams.

I do not live in a flood zone.
Everyone lives in a flood zone - it is just a question of whether you live in a moderate-to-low or high risk area. While flood insurance is required in high risk areas, people outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding.

Flood insurance is too expensive.
The average flood insurance premium is about $600 a year (less than $48 per month). If you live in a moderate-to-low risk area, you may qualify for a Preferred Risk Policy with a premium starting at $129 per year. Considering that even a few inches of water can cause tens of thousands of dollars in damage, the annual premium is well worth the financial protection from floods.

My area has never been flooded.
The fact that a flood has not occurred recently doesn't mean one has not happened in the past or that one will not happen in the future. Flood history is just one element used in determining flood risk. Other factors include your community's rainfall and river flow data, topography, wind velocity, and building development (existing and planned).

I have already experienced a flood - that will not happen again in my lifetime.
You may have heard of the "100-year flood" and may be thinking that it only happens once every 100 years. However, this term is misleading and actually refers to the flood elevation that has a 1% chance of being equaled or exceeded each year. It has nothing to do with the number of floods that may happen over the course of a lifetime. Thus, the 100-year flood could occur more than once in a relatively short period of time. Here are some additional thoughts to consider:

  • Many areas of the country experience more than one major flood in a lifetime.
  • Some areas experience repetitive loss – two floods in a 10-year period. Over the years, FEMA has paid almost $3.5 billion dollars in claims for repetitive loss properties.
  • If you experience a flood, receive federal disaster assistance, and choose not to purchase and maintain flood insurance, you may become ineligible for federal disaster assistance if a flood occurs again, if it is determined that flood insurance would have paid for the damage.
  • If you have a mortgage, your lender may now require you to purchase flood insurance.

I cannot purchase flood insurance, because I live in a floodplain.Homeowners Insurance Quote
Except in certain specific cases, you are eligible to purchase flood insurance, as long as your community participants in the NFIP. So, whether you are in a high-risk or low-risk area, flood insurance from the NFIP is available.

Flood insurance does not cover contents in my basement.
Contrary to what many believe, flood insurance does provide limited basement coverage. Though it does not cover finished walls, floors or ceilings, or personal belongings, it does cover structural elements, essential equipment, and other basic items normally located in basements. Imagine the costs associated with replacing the items listed below.

Building coverage includes:

  • Furnaces, water heaters, air conditioners and heat pumps
  • Electrical junction and circuit breaker boxes and required utility connections
  • Unpainted drywalls and drywall walls and ceilings, including fiberglass insulation
  • Foundation elements and structural support equipment
  • Sump pumps
  • Well water tanks and pumps, cisterns and the water in them
  • Oil tanks and the oil in them, natural gas tanks and the gas in them
  • Pumps and tanks used in conjunction with solar energy
  • Stairways, staircases, elevators and dumbwaiters
  • Debris cleanup
Examples of contents included in coverage are:
  • Washers
  • Dryers
  • Freezers
  • Food contained in freezers

Flood insurance does not cover common issues like seepage or leaks.Homeowners Insurance Quote
Generally, neither homeowners nor flood insurance policies cover damage caused by seepage, dry rot, or animal pests, as they are considered the result of poor home maintenance, and therefore preventable. However, flood insurance will cover damage caused by sewer or drain backup, or overflows from a sump pump or related equipment, if the event is a direct result of flooding.

I cannot buy flood insurance right before or during a flood.
Unlike some other lines of insurance, an approaching storm does not trigger a moratorium on flood insurance purchases. However, once you have applied and paid the premium, there is usually a 30-day waiting period before the policy becomes effective.

Though it cannot cover a "loss in progress," your newly-effective flood insurance policy will provide coverage for any future flooding. The bottom line? Do not wait until after the storm warnings to buy flood insurance!

Peoples Choice Insurance Agency Corp 516 364-2700 or 888 573-2230

Disaster Assistance: (800) 621-FEMA, TTY (800) 462-7585
U.S. Department of Homeland Security
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