FOR IMMEDIATE RELEASE
May 25, 2010
Contact: Jason Moon 517-335-1700
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LANSING – Recent storms across the state serve as an important reminder for homeowners and renters to be prepared for the flooding of their residence. Floods can happen at anytime without warning and can threaten homes anywhere in Michigan. Today the Office of Financial and Insurance Regulation (OFIR) urged Michigan consumers to be prepared for a possible flood.

“Flood damage is not covered under a standard homeowners policy,” OFIR Commissioner Ken Ross said. “If you’re in a flood zone, it’s critical that you evaluate whether you should buy flood insurance before the waters begin to rise.”

What is Flood Insurance?

Flood insurance is a special policy that is federally backed by the National Flood Insurance Program (NFIP) and available for homeowners, renters and businesses. The standard flood insurance policy pays for direct physical damage to your insured property up to the replacement cost or actual cash value (ACV) of actual damages or the policy limit of liability, whichever is less. Not everyone can purchase flood insurance – the property must be in a designated flood zone.

Homeowners: You may purchase flood insurance covering up to $250,000 of flood damage to your home. A standard flood policy will cover structural damage, including damage to the furnace, water heater, air conditioner, floor surfaces (carpeting and tile) and debris clean-up. The contents of your home are not covered under a standard policy, but for an additional premium, you also may purchase flood coverage for up to $100,000 of damage to your personal property.

Renters: Flood is not covered under your basic renters insurance policy. Talk with your insurance agent about your flooding risks to decide if you need flood coverage for your belongings.

Business owners: A flood insurance policy will cover up to $500,000 on a non-residential building and its contents.

What is a Flood?

A flood is an excess of water (or mud) on land that is normally dry. The NFIP defines flood to be a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties (at least one of which is the policyholder’s property) from:

• Overflow of inland or tidal waters;
• Unusual and rapid accumulation or runoff of surface waters from any source;
• Mudflow; or
• Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining, caused by waves or currents of water exceeding anticipated cyclical levels.

Plan Ahead - Flood Insurance has a Waiting Period

It is very important to plan ahead. A flood insurance policy normally will not go into effect until 30 days after you purchase the policy.

Make a Home Inventory

 Create a record of your personal property, such as clothes, jewelry, furniture, computers and audio/video equipment. Photos and video of your home, as well as sales receipts and the model and serial numbers of items, will make filing a claim simpler. In addition, add insurance information to your inventory information; i.e., the name of your insurance company and agent, policy numbers and contact information. A home inventory is a good idea even for those individuals who do not have flood insurance. Every homeowner or renter should have a record of their personal property.

For more information about flood insurance, visit the NFIP Web site at www.floodsmart.gov.

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