Hey everybody, John Herman, PropertyUp and today I’m on the shores of the Fox River and I want to talk a little bit about flood insurance. We just ran into the biggest flood we ever had on the Fox River and I want to point out some things that you should know about flood insurance for all you river enthusiasts out there like me and you newbies who are thinking about purchasing waterfront property.
Today’s video is regarding flood insurance.
I’m going to cover two areas in the video, 1. Is Flood Insurance Required? and 2. What is covered by flood insurance?
- Is Flood Insurance Required? The quick and easy answer is “no.” No, it’s not required. The only time flood insurance is required is if you are getting a loan on a property, and the bank where you are getting the loan requires that flood insurance be placed on the property. So that is the only time you will actually pay for flood insurance. So if you’ve paid off your mortgage or you purchased your property with cash, you do not have to have flood insurance.
Now, my suggestion is, I live on the river in Barrington and we have been flooded three times within the past 10 years. A lot of these flood zones are 100 years and 500 year but these unprecedented floods and a number of floods that have been happening, we are setting records every new flood, so I do highly suggest looking into or having flood insurance if you are on a natural body of water, such as a lake or a river. If you have a man made lake or by a man made lake you will not be required to have flood insurance for that.
- What is covered by flood insurance?
The reason I want to go over this is that most people think that their homeowner’s policy will cover them during a flood, and that is definitely not true. Flood insurance is a separate policy and your homeowner’s will not cover a flood. The average claim we’ve found with floods is about $40000, and the maximum amount that can be covered per claim is $250000 per claim or per flood.
So I wanted to let you know some of the things that are covered during a flood are
-Foundation of the house
-Carpet and drywall
-Washer and dryer
-About $2500 in valuables that you had in the home
This is not a limited list; it’s just a good overall view of what is covered.
What is NOT covered by flood insurance?
-Suitcases full of cash – move cash out of your basement
-Bonds, stocks, precious metals
-Loss of income during/because of flood
-Sewer back up
Hopefully, you found these high-level things helpful, regarding flood insurance, Have a good one and stay dry!