Flood insurance is undoubtedly a must for 2014. Here’s all you need to know about flooding and what it has to do with your insurance!
As of October 1, 2013, a premium of $2,800 per year provides coverage of $500,000 for buildings and $500,000 for contents for companies qualifying for a preferred risk policy (in low or moderate-risk areas). For companies in high-risk areas, the standard rated policy is the only option available under the NFIP. Annual premiums start at $1,666 for $100,000 and $50,000 for building and contents respectively.
Separate coverage also can be obtained for buildings and contents. Premiums for standard-rated policies are based on such things as: Age of the building, number of floors, occupancy, degree of flood risk. Replacement Cost Coverage is not available for commercial buildings or contents, and business interruption insurance is also not available through the NFIP.
Extreme Weather May Continue
Statistical forecasts indicate that many cities are at risk if this extreme weather pattern continues, and experts are debating how to respond. Some cities are examining or revising floodplain maps to ensure they reflect current realities, and discussions are underway on measures to make urban spaces, in particular, more weather resistant.
With warnings such as these, businesses are naturally concerned about flood insurance. They should be: According to NFIP stats, 25 percent of businesses experiencing an event such as a flood closed up shop. From 2008 to 2012, the average flood claim was more than $75,000.
However, with the debt accumulated by the NFIP and dire warnings of sky-high premiums in the future, many are unsure about what to do and where to turn.
Letter of Map Change
The online Letter of Map Change constitutes a request to be re-designated. If granted, it will save on premiums and even offer some the option of not having to purchase flood insurance. If you believe you’ve been mis-mapped, it may be worth pursuing.
As noted, there is considerable debate in the insurance industry about the fate of NFIP. Changes can happen quickly. If you’re planning to purchase flood insurance, discuss it with your insurance professional, who will be aware of the most recent developments.
Make Sure You’re Protected