Fact vs. Fiction: Comprehensive Guide to Flood Insurance

Understanding the limitations of insurance coverage is key to ensuring sufficient protection is in place. Telcom Insurance Group can help assess your needs to determine how much coverage is enough. Our team has done just that for our partners in the rural telecommunications industry, with many opting for cyber liability coverage as well as property and casualty insurance. While these coverages are undeniably important, they leave insureds vulnerable in a catastrophic weather event. Without the proper coverage, what happens if a business like yours falls victim to flash flooding?

At Telcom Insurance Group, we strive to make sure that your coverage takes your business needs into consideration – plus the requirements of the surrounding area. Flood insurance can be an important piece of protection to safeguard valuable financial assets – like buildings and personal belongings. Whether you reside in rural Kansas or call the Florida coast home, flood insurance may be the difference between full recovery and devastating loss.

Keep reading to learn more about flood insurance, then contact Telcom Insurance Group for more information.

What is Flood Insurance? 

Flood insurance is a specific type of property insurance that covers a dwelling and personal property from losses directly caused by flooding. The NFIP defines a flood as “an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties.”

Flood insurance coverage includes scenarios like these:

  • A river, lake, or body of water that overflows its banks
  • A hurricane storm surge
  • A heavy downpour that builds faster than it can drain
  • A mudflow
  • Melting snow that seeps into a building or dwelling

Homeowners, renters, and commercial property policies can cover certain types of water damage, such as a burst pipe or appliance leak, but generally don’t include coverage for damage from a major weather event like a flood. When a defined flood occurs, the National Flood Insurance Program steps in.

What is NFIP? 

The National Flood Insurance Program, or NFIP, is run by the Federal Emergency Management Agency (FEMA). Created in 1968, NFIP was designed to help property owners prevent and recover from flooding, becoming the top provider of flood insurance in the U.S.

The NFIP works with flood-prone communities to adopt and enforce floodplain management regulations and mitigate the effects in the aftermath of a flood. While not all communities participate in this program, Telcom Insurance Group offers flood insurance in all 50 states. Natural disasters can have devastating consequences, putting your business financially at risk. In fact, just one inch of floodwater can cause up to $25,000 in damage.

NFIP and the FEMA Flood Map 

NFIP not only offers flood insurance for at-risk communities, but has developed maps that showcase the likelihood of flooding in communities across the nation. To determine your flood zone, contact your city or county government’s Building or Planning department for more information. You can also access the maps of flood zones through a searchable database (INSERT LINK FOR DATABASE). 

The database will ask you to enter the address of your commercial property to determine if it is located in an area that has a 1% or greater chance of flooding, called a “special flood hazard area.” If that is the case, it is important to consider adding a flood insurance policy to your coverage list. Even if your commercial property is located in a moderate- or low-risk area, we recommend contacting Telcom Insurance Group to discuss if flood insurance is right for you.

What Does Flood Insurance Cover?

Two types of coverage – building and contents – are typically offered to protect your home and belongings in the event of a flood.

If you opt for building coverage, it will protect your:

  • Electrical and plumbing systems
  • Refrigerators, stoves, and built-in appliances
  • Permanently installed catering and cabinetry
  • Foundation walls and staircases
  • Detached garages

Contents coverage, on the other hand, protects your: 

  • Personal belongings (clothing, furniture, etc.)
  • Washer and dryer
  • Valuable items
  • Portable and window air conditioners
  • Curtains

Coverage for water damage can often be tricky to understand and sparse in detail, due to the fact that the root cause of the flood is used in determining if coverage applies. If not, or if flood insurance is not present, your business may face a serious financial blow – and be forced to pay out-of-pocket for damages.

Fact vs. Fiction: Flood Insurance Edition

Although floods are the most common – and costly – natural disasters that impact the U.S., there are many misconceptions about protection coverage. Here are a few of the most common myths, along with their facts that combat them:

Fiction: You can’t buy flood insurance if the property is located in a high-risk flood area. 

Fact: Whether your building faces a high risk of flooding or is considered relatively low risk, flood insurance is available. The NFIP offers coverage to select communities that participate in its program, but Telcom Insurance Group offers protection to our telecommunications industry partners in all 50 states.

Fiction: Flood insurance is strictly available for homeowners.

Fact: Flood insurance is a form of protection for dwellings and property. This includes residential properties like homes and condominiums, as well as commercial structures. Commercial structures can be insured to a limit of $500,000 for the building and $500,000 for the contents with NFIP. The same coverage limits may apply with Telcom Insurance Group.

Fiction: Only those with property in high-risk flood zones need to insure their buildings and personal property.

Fact: If your property is located in a rural area or near a waterfront, it is advisable to protect your financial assets by adding flood insurance. Remember that anyone is vulnerable, both physically and financially, to flooding. Therefore, it is important to have the proper protection in place should a worst-case scenario become reality.

Need Guidance on Flood Insurance? Contact Telcom Insurance Group!

Water damage does not discriminate, and can wreak havoc on any business – including buildings and their contents. Understanding the limitations of your commercial property policy and the potential for flooding could be the difference between a major setback and total confidence in coverage.

At Telcom Insurance Group, we want to ensure that your commercial buildings and personal property are protected in the event of a flash flood – whether you’re located near a body of water or not. Reach out to Telcom Insurance Group to learn more about flood insurance or to obtain coverage today.