Disaster Recovery News

The spring flood season is just around the corner. According to FEMA, floods are the most expensive type of disaster in the U.S., and everyone should have a home and/or business safety plan that includes flood insurance. Flood insurance does not just cover damage from excessive rains or bodies of water that reach flood stage. It covers water damage in general, including a malfunctioned sump pump, burst or broken pipe or a leaky roof. Even if you do not live in a flood-zone, having a flood insurance policy can help save you money when it comes to the high costs associated with recovering from water damage.

Myths and Facts about Flood Insurance

Myth: There is no way a flood will ever happen where I live.
Fact: Nearly 25% of flood insurance claims occur in areas that have a low to moderate risk of flooding. While it may not rain a lot where you live, the pipes in your home or office to a broken sewer line can cause water damage at any moment. Moreover, you do not need to live in a flood-zone to purchase flood insurance.

Myth: Flood insurance is an expense I cannot afford.
Fact: It is cheaper to pay for flood insurance than to pay for flood restoration services out-of-pocket. Additionally, the farther away your home or business is located from a flood-zone, the cheaper a flood insurance policy costs.

Myth: If there is a flood, federal assistance will help pay for the flood recovery expenses.
Fact: Federal assistance is often not available for more than 50% of community flooding incidents. Before a community is eligible for federal disaster assistance, the President must declare it a disaster area, which could take several weeks. Disaster assistance is then generally provided in the form of a loan that includes interest. When you have a flood insurance policy, the only thing you may need to pay is the deductible—an amount you can choose when you purchase a policy. In the event of a flood, a flood insurance policy will provide the funds to pay for the flood remediation expenses, such as drying wet documents and replacing water-damaged items.

When it comes to flood insurance, it is not a question about whether you may experience a natural disaster or not. The real question is if you can afford to pay the thousands of dollars associated with recovering from water damage.

[photo: thirteenthbat]

If residents and business owners near the Mississippi River do not have flood insurance, now is the time to get it. The” Winona Daily News” reports the National Weather Service predicts the famous river will reach “moderate flood stage.” However, record-breaking floods are cautiously predicted.

The article states:

“Periods of mild weather in the past few weeks released some of the liquid trapped in the snow cover, but additional snowfall has kept the snow cover equal to or higher than it was Feb. 17, according to the flood outlook issued Thursday.

“What’s worse, western Minnesota has the highest snow and water content on record… And all that water drains into the Mississippi.”

The cool March weather mixed with above-normal precipitation is feared to cause a rapid melting of the lingering snow once the weather begins to warm. The report reminds readers that flood insurance benefits do not kick-in until 30 days after the policy begins.

What to Do if You Experience Water Damage

If you experience flooding of any kind in your home or business, the following can help minimize water damage and mold growth:

• Unplug electrical equipment and shut off the circuit breaker.
• Take pictures of the water damage.
• Call your insurance company.
• Call a flood restoration company.
• Begin removing water while you wait to hear a response from the insurance company and restoration company. Use a mop, waterproof shop vacuum or pump to remove the water.
• Remove wet materials from the building. Throw away any items that do not dry within 24 hours, like mattresses, toys or padded office furniture as they may harbor dangerous mold.

Learn about recovering from a flood.

[photo: Kevin Jack]

The year 2009 was one of record-setting devastation for those near the Red River in North Dakota. Since then, the city of Fargo has purchased 50 properties in an attempt to protect the city from flooding without the need to use sandbags. However, homeowner John Stern will not budge.

Dream Home

Stern purchased his dream home over 25 years ago—a 1,800 square foot property along the Red River designed by architect Frank Lloyd Wright. Stern told the Associated Press in an interview that his home is like a tree house because of its placement among the trees and the unique architectural twists and turns that allow for fantastic river views. The city of Fargo is trying to purchase Stern’s home, along with 14 others.

In 1997, Stern unsuccessfully used 11 electric pumps in an attempt to keep floodwaters away from his home. Following the disaster, he built a clay dike. In 2009, Stern fortified his levee with sandbags. In addition to purchasing flood insurance, some of Stern’s neighbors invested thousands of dollars to raise the foundations of their homes to protect them from flood damage.

Flood Predictions and Fears

Pat Zavoral, a Fargo city official, states the National Weather service predicts there is a 70 percent chance that the river will crest this spring at a level higher than it did during the fall of 2010. The city’s buyout option is voluntary, and residents are warned that the city may lack funds if they dwell on the decision to sell their homes for too long. Fargo city officials state that homes on their buyout list are in danger of continual water damage from floods even if they divert the Red River, especially if they experience a “500-year flood event.” Residents on the buyout list feel pressured to sell and fear their homes will suffer a loss in value by being placed on the buyout list. Regardless, the city of Fargo will continue to help homeowners place sandbags around their properties to protect their riverside homes.

Learn more about recovering from a flood.

[photo: Adam Quartarolo]

It is easy for a home or business owner to look for the cheapest insurance premium, sign on the dotted line and pay the minimum amount due. However, many do not realize is that they may not have sufficient coverage until they need to file a claim. Understanding the details regarding a commercial insurance policy can help ensure business continuity and get life back to normal faster.

Tips for Making Sure You Have Enough Coverage:

• Find an insurance agent or broker authorized to advise you on insuring your home or business properly. Agents typically represent one insurance company, while brokers represent several. Make sure the individual has a license to sell the line of insurance you are looking for and has experience in the insurance field.
• Tell your agent specifically that you want your home or business properly insured with full replacement coverage. Full replacement coverage will cover the cost of the home or the building in which the business is located, plus the contents inside.
• Know the limits of a replacement insurance policy. Many policies offer extended replacement policies that have a cap on the amount an insured is paid to replace a home or building, plus an additional amount of up to 25 percent of the policy limit if the original limits do not cover the contents damaged.
• Know what the policy does not cover. Often, home and business owners must separately purchase flood insurance, which covers damage caused by water. What some policyholders do not understand is that a regular insurance policy for a home or building may not cover damage as a result of a problem within the building, such as a burst pipe. It is a good idea to review with an agent the losses an insurance policy does not cover.
• Review your insurance policy annually. Meeting with an insurance agent on an annual basis can help prevent a policyholder from not having enough insurance. Things to tell an agent about include additions to a home or business, expensive items located in the building, changes to the layout of the building, the installation of a pool and so on.

While it is the responsibility of an insurance agent to make sure a client has sufficient coverage, it is up to a home or business owner to make sure they have the coverage they want. Knowledge about a policy and good communication with an insurance agent can prevent an individual from being underinsured.

Learn more about flood insurance basics.

One of the greatest sources of pride in a person’s life is home ownership. To help protect this lifestyle, individuals purchase homeowners insurance so they have assistance in the event of a disaster. Homeowner’s policies cover damage due to events such as fires, theft, strong winds, lightening strikes and so on, but there are common events that are not covered.

Holes in Your Homeowners Insurance Policy

Some of the common exclusions in home insurance policy include acts of war, acts of God and nuclear events. Although the chances of these things happening to you are slim to none, there common events that could affect your home this fall and winter, and the cost to repair the damages can break your bank. The following are things your homeowner’s policy may not cover:

• Water damage of any kind. A flood that reminds you of Noah’s ark, water from a firefighter’s hose after putting out flames, leaks from your roof or windows and a leaky or burst pipe: ways water can damage your home. Water damage is not covered by your homeowners insurance unless you also purchase a flood insurance policy.
• Some damage to your roof. If your roof is still under warranty or damage to it was caused by not maintaining it properly, chances are your claim to have it repaired will be denied.
• Damage to materials for your home business. If you operate a small business from your home and there is a disaster, your homeowners insurance will not help cover the expense to replace your lost business items. Unless you have a commercial insurance policy, you will have to pay for a new computer, drying wet documents, a new desk or other business materials out of your own pocket.

If you are not 100% sure about what your homeowners insurance policy covers, talk to your agent before you find out the hard way.

Learn about recovering from a disaster.

[photo: Daniel Lobo]