Commercial Flood Insurance helps protect your business from the damage costs that come from floodwater. A commercial flood insurance policy will not only protect the location of your business but also the physical contents and assets. A commercial flood insurance policy is designed to protect your business if your floors, walls, ceilings, equipment and fixtures as well as furniture, inventory and business property sustain floodwater damage.
Do I Need Commercial Flood Insurance? I Never Thought it Would Happen to Me!
Previously Flooded NC Resident Learns from Her Initial Decision to Go Uninsured
When she moved into a fairly new home and was not required by her mortgage lender to purchase flood insurance, a Fayetteville, NC resident didn’t give voluntarily purchasing flood insurance much thought. That
changed, however, when she was forced to pay over $50,000 in uninsured flood damage repairs following Hurricane Matthew less than a year later. At least she learned enough from that experience to obtain flood
insurance against any future damage. As it turned out, the future was not very far off when her home was damaged again by flooding during Hurricane Florence.
She is one of the lucky few as we are hearing as many as 85% of those suffering flood damage during Florence will be uninsured.
Flood Zone Changes Do Not Remove the Risk of Flooding
Many falsely conclude a revision of their flood zone from a high risk zone to a reduced risk zone proves they are not at risk of flooding. As a result, whether the zone change stems from a FIRM update or the issuance of a Letter of Map Amendment, the misinformed property owners feel it’s safe to cancel their flood insurance. 70 residents of a suburb of Buffalo, NY, learned what a mistake that can be when a rapid mid-winter thaw caused a small stream to overflow and flood their homes a few years ago. As one resident put it; “I canceled my policy four months ago when FEMA downgraded my flood zone.” As a result, he was left to pay for a partially collapsed basement wall without the benefit of insurance. Make sure your clients understand a flood zone downgrade does not mean their risk is removed.
Furthermore, Federal Disaster Assistance is NOT a good alternative to flood insurance.
The Federal disaster assistance offered by FEMA often falls far short of providing the financial support uninsured property owners need to repair their flood damaged properties. Make sure your clients consider the facts about disaster assistance when deciding whether to purchase flood insurance.
- FEMA can’t offer one dime of assistance unless the damage causing event qualifies as a Presidentially declared disaster. Very few flood events achieve that status.
- The most FEMA can provide in the form of a grant (that doesn’t have to be repaid) is currently $34,900. That would not even cover the average flood claim in most years, and few people actually receive the maximum. For example, following Hurricane Harvey, the average grant was only $4,300 while the average flood claim was $115,000!
- Most Federal assistance comes in the form of loans of up to $200,000 for a residence and $40,000 for personal property. Although the interest charged on disaster loans is low, the loans do have to be both qualified for (just like a car loan) and repaid. Additionally, until the loan is repaid, the recipient must carry flood insurance to cover the outstanding loan balance.
- Secondary and seasonal homes, which many waterfront homes are, do not qualify for either form of Federal disaster assistance.
- Disaster assistance is will only offer a ‘leg up’. It is not intended to bring people back to where they were before the damage occurred.
For all these reasons, Federal disaster assistance is not a good alternative to flood insurance.