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Federal Flood
Insurance in New Bern,
N.C. is required if you live in a flood plain and have a federally
backed mortgage.
The National Flood
Insurance Program, (NFIP), is administered by the Federal emergency
Management Agency, (FEMA). This program makes federally backed flood
insurance available in communities that adopt and enforce floodplain
management ordinances to reduce future losses. Currently more than 4
million flood insurance policies are in effect.
According to the National Flood Insurance
Program the definition of a flood is when a land mass that is normally
dry is partially or completely under water. Flooding can be caused by
one of the following:
1.Overflow of inland or tidal waters.
2.Rapid accumulation of surface water such
as rainfall.
According to FEMA, 1/3 of NFIP claims come from outside of the
designated high risk flood areas. There are 10 million properties in
high risk, special flood hazard areas, yet no more than 1/4 of these
properties are covered
by flood insurance.
The NFIP contracts with insurance
companies to sell flood insurance. The insurance company receives a
small portion of the premium. When a flood claim occurs the insurance
company will an adjustor to adjust the claim.
All NFIP policies have the same language
and will cost the same regardless of who sells the policy. There are
three kinds of NFIP policies. There are
1.commercial policies
2.condominium policies
3. single family policies
Four types of coverage are offered with
flood policies,
1.building coverage
2. Personal property coverage
3. Debris removal coverage
4. Increased cost of compliance, code up
grades
Building coverage covers a list of
23 specific property items, including awnings, canopies, and ventilating
equipment and of coarse the structure itself.
Personal Property Coverage applies
to personal property within a fully enclosed insured building. Unless
you have a separate policy, business related property would not be
covered. A limit of insurance is imposed on artwork rare books, jewelry,
and furs. You should consider separate coverage for these items.
Debris Removal covers the expense
to remove the debris caused by the flood occurrence.
Increased Cost of Compliance will
reimburse the insured for compliance with a state or local floodplain
management law or an ordinance affecting repair or reconstruction of a
structure suffering flood damage.
Special Coverage
Your flood policy provide temporary
coverage for property that has been moved to another location due to the
threat of flooding. Coverage is limited and is only covered for 45 days.
There is also limited coverage for loss mitigation for such things as
sandbags, pumps, and fill dirt.
Property not Covered
There are 11 types of property that are
not insured under the flood policy. Many of these exclusions are
standard to general property coverage's and include accounts, valuable
papers, currency, motor vehicles, bill, livestock, birds, and boats.
How Flood Damages Are Valued
Flood damage is valued on either on either
replacement cost, RCV, or actual cash value, ACV. Replacement cost is
the cost to replace that part of a building that is damaged without
depreciation being deducted. To qualify for a replacement policy the
building must be a single family dwelling, must be your principle
residence, and must be insured for at least 80% of the full replacement
cost of the building.
Actual cash Value is replacement cost
value less the physical depreciation. Some building items such as
carpeting are always adjusted on an ACV basis. Personal property is
always valued at ACV.
The Bottom Line
If you live in an area prone to flooding
it is important to consider purchasing flood insurance even if you are
not required to. Contact your insurance agent to find out the important
details of flood insurance.
Note: Portions of the information contained on
this page were copied from Adjusting today magazine. |
