Flood Insurance

Q: Why should I purchase flood insurance?

A:  You should purchase flood insurance if your property is located in a flood-prone area, as you face a significantly greater risk of flood loss, about 26 times that of fire loss. Obtaining flood insurance for high-risk areas may also be required by financial institutions. Even if your property is not in a high-risk area, you may still want to consider flood protection. More than one-third of flood loss claims are for property located outside high flood-risk areas, and can occur due to heavy rains or melting snow which raises the level of ground water and causes overflow of lakes, rivers or streams. That's why it's a good idea to discuss your flood insurance with a Cool Insuring representative if you are in a flood-prone area.

Q: Isn't some amount of flood insurance included as part of my property insurance policy?

A:  Though many property owners mistakenly believe that it is part of their existing coverage, flood insurance has always been a separate insurance policy. "Difference in Conditions" policies - available only to businesses - may or may not provide flood coverage. Unfortunately, most people do not discover the extent of their coverage until it is too late.

Q:  What about Federal disaster assistance?

A:  In most cases, the only aid provided to disaster victims is in the form of a loan which must be repaid with interest.  Because the cost of both rebuilding your home and replacing its contents can be enormous, insurance which reimburses you for property damage is the more financially sound option.

Q:  Would it be worthwhile to shop around for the best rates?

A:  Because this insurance is administered through a federal program, and not through a private insurance carrier, the rates are standards regardless of where you purchase disaster coverage.

Q:  So is the amount of coverage standard as well?

A:  Yes. Each policy covers a single building and its enclosed contents. The policy also provides additional overage for related expenses, such as sandbagging. There are some limitations to flood coverage (i.e. contents of basements), which can be specifically explained to you by your Cool Insuring representative.

Q:  Would this policy cover property other than buildings and contents?

A:  Generally, no. Automobile and contractor's equipment policies usually include protection for the peril in the flood. Disaster and Flood Insurance Protection for other exposures can sometimes be covered on an in-land marine policy.

View small business insurance services through Cool Insuring's Commercial Lines Department.