Flood insurance is a specific kind of coverage designed to protect property against the consequences of flooding and the ensuing damage. These policies can be attached to business property or individual property insurance policies.
The problem is that many folks make the erroneous assumption that flood coverage is somehow already included in their existing property insurance coverage. Most of the time this would be a false and potentially dangerous assumption to make. In fact, flooding coverage is practically never included in either commercial or homeowners’ policy coverage. If your region is prone to flooding on a fairly frequently basis, you can greatly benefit from good flood insurance coverage to protect your personal or business property and belongings.
A flood policy starts to work when a flood strikes. If a flood happens while one is covered, the insurance provider will pay out for the damage, up to the coverage limits. Floods can be a disaster, so these costs can be overwhelming without this protection in place.
Flood insurance policies often have a variety of different coverage limits depending on the kind of coverage chosen. For example, a policy might cover $100k in property damage, $20k in personal property damage, and may also have some other protections built in such as the provision of lodging while a property is being repaired or rebuilt. In the case of commercial flood policies, business interruption coverage can also be included.
A flooding policy provides separate protection than that of simple water damage. Water damage can happen when, for example, a pipe in the kitchen bursts. While the room may be “flooded,” it’s still not classified as a flooding. Flooding is only considered to happen when it is due to some kind of a natural disaster, like with a severe storm or a body of water overflowing its banks, for instance.
There are many regions where flooding is more common and, as such, this coverage would be very critical.
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