Most homeowners who have used their flood insurance policy have discovered that the coverage limitation of $250,000 on the building was insufficient to cover the cost of repair to their property. An excess flood insurance policy provides additional coverage over the amounts offered in the government program.
In general, the number of people who buy flood coverage is far below the number of who should carry it. According to Floodsmart.gov, between 2008 to 2012, total flood insurance claims averaged nearly $4 billion per year.
What are the standard flood policy limits?
Every insured needs to be advised that if their property is in a designated flood zone, the property is eligible for the following NFIP limits:
- Dwelling building: $250,000
- Personal property: $100,000
- Commercial building: 500,000
- Business personal property: $500,000
When is a standard flood policy not enough?
The National Flood Insurance Program policy covers you up to $250,000. If your home is worth more than that, you should consider excess flood insurance which takes over where regular flood insurance leaves off.
Let’s assume it would cost $750,000 to rebuild your home. That leaves $500,000 not covered by a standard flood policy. What do you do? Time to consider an excess flood insurance policy.
Excess Flood Insurance can increase your standard single-family coverage by up to an additional $500,000 – covering up to $750,000 total.
Homeowner’s can purchase up to $100,000 above the existing coverage cap (for a total of $200,000 for a single-family structure). Excess Flood limits could be even higher in your state. Ask your independent agent for details.