Extreme weather is becoming more common, and its consequences are far-reaching than many people anticipated. (Just look at Hurricane Ida's recent devastation across multiple states.) Even so, most homeowners feel that their insurance policy will cover them in the event of a disaster like floods. Buyer beware, warns Sean Harper, CEO and co-founder of Kin Insurance, a new data-first, direct-to-consumer home insurance firm that use cutting-edge artificial intelligence to better analyse and price risk, particularly in relation to climate change. Why is that? Because flood damage is one of the most common things that isn't covered by your standard policy.
Isn't flood insurance not included in my normal policy? Even in areas like Florida, according to Harper, damage from floods is not covered by a standard homeowner's policy. To put it another way, you must request that it be added on. “It's strange that insurance companies require insurance against fire and hurricanes, but not against flooding,” Harper explains. (Earthquake coverage, he adds, is another issue that isn't always included in your policy.)
The devil’s in the details. According to Harper, there are some areas of the country where flood insurance is required, but only if you live in a FEMA-designated flood zone. The problem is that a lot of regions flood, as we see every day with extreme weather occurrences. “In fact, outside of a FEMA-designated flood zone, 80 percent of all flood damage occurs,” Harper notes. “As sea levels rise and rainfall increases, more places will flood, but the other concern is that municipalities will campaign to avoid being placed in a FEMA flood zone because it will affect their real estate prices. Because those lines haven't been revised in a long time, the issue becomes rather political.”
The bottom line. Harper believes that most people should have flood insurance. If you're not sure, give us a call and we'll explain your situation so you know exactly what your policy covers. (For instance, what components of your property are covered in the event of water damage? Is that your basement? (Do you have a garage?) After all, the more information you have, the better.
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