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When Hurricane Harvey hit Houston in 2017, it left over 200,000 damaged homes in its wake, and caused $125 billion in total damages. Of the houses and businesses affected by the storm, 80% were located outside of the 100 year flood plain. The vast majority of these property owners did not have flood insurance.
FEMA paid out $379 million in disaster relief funds to help families rebuild, but what most people don’t realize is that this federal aid is actually a loan from the government that has to be paid back—with interest!
According to the National Hurricane Center, 3/5 of the costliest hurricanes on record—Harvey, Irma, and Maria—occurred in 2017. Combined, these devastating storm systems racked up $265 billion in total damages to homes, businesses, and infrastructure in just one hurricane season.
Experts point to climate change as a major contributing factor to the rising scale of destruction that is becoming more commonplace in our country and around the world.;
A 2-3° rise in air temperature in the Gulf Coast region means that, on average, the air can hold more moisture than ever before. Hurricane Harvey dumped two feet of rain down on the city of Houston in the first 24 hours. Some areas received as much as 60 inches of rain during the storm, and flooding stretched across an area the size of New Jersey.
Rising sea levels have also put cities near the Gulf of Mexico in greater peril during hurricane season. Higher overall temperatures have caused polar ice caps to melt in Antarctica, which has caused sea levels to swell six inches in the Gulf in the last two decades, making flooding that much more likely.
In recent years, home and business owners have been buying private flood insurance in greater numbers. Because private flood insurance policies can vary greatly depending on the insurance company, you’ll want to ask your local insurance agent to give you quotes on both NFIP and private flood insurance to see what each will cover for you.
Here are a few highlights of private flood insurance features that may help you understand how private flood insurance may benefit you:
Higher Coverage: Private flood insurance typically offers a higher level of coverage than NFIP’s $250,000 limit on your home and $100,000 limit on your belongings.
Shorter Wait Times: NFIP often takes 30 days to go into effect, but with some private insurers your coverage could go into effect in less than a week.
Additional Flood Assistance: If you have to temporarily relocate, private insurance may provide for short-term housing. Depending on the policy, you could also potentially purchase coverage for items or areas not covered through NFIP.
Private and excess flood insurance goes above and beyond the standard coverage limits. The program also covers funding for your family's living expenses to help you through the transition process. Excess coverage provides up to $5 million to rebuild a home or business, and up to $2 million in most states to replace stand-alone contents that may be valued above the NFIP limits.
According to FEMA, a mere inch of flood water in your home can result in over $25,000 in property damage! If flooding is a concern to you and your family and the price to rebuild your home exceeds the NFIP policy limit, then excess flood insurance may be coverage to consider.
As Executive Vice President, Lending & Insurance Solutions, Ty Harrison leads teams of lending and insurance professionals that are dedicated to delivering value-added programs, services and technology tailored to address the needs of lenders, loan servicers, portfolio managers, mortgage brokers, insurance agents and insurance brokers.
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