Today's guest post is authored by Juanita Martinez, a financial writer offering solutions on insurance related matters. Based in Idaho, Juanita has been associated with the AmPmInsure Community since 2007. AmPmInsure (http://www.ampminsure.org/) is an online forum community where industry professionals provide insurance based solutions. With the onset of hurricane season, Juanita's post on flood insurance is particularly timely.
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Do you know that your homeowners' or business insurance policies do not provide coverage for losses caused by flood? Residents residing in a community participating in the National Flood Insurance Program (NFIP) can purchase a flood insurance policy to cover your residential or business properties. A host of information is found at the NFIP's official website, http://www.floodsmart.gov.
Flood insurance coverage – Risk estimation
You, being a homeowner, need to purchase flood insurance coverage to insure the property as well as its contents. Depending upon the location of your house, the property can be considered at moderate-to-low risk or high-risk for exposure to flood damage. The premium rate of flood insurance is largely dependent on whether your house is in a high-risk or moderate-to-low risk area. These two types of coverage are discussed below.
* High-risk coverage – You will need to purchase a standard rated policy if your house is situated in a high-risk area. This insurance policy provides you with separate coverage for the building and its contents.* Moderate-to-low risk coverage –A Preferred Risk Policy is for those who live in a moderate-to-low risk flood area. The premium cost of such an insurance policy is the lowest compared to other policies offered through the NFIP. This policy offers building and content coverage for a single low price.
Standard Flood Insurance Policy Forms
The National Flood Insurance Program offers three types of Standard Flood Insurance Policy Forms as noted below. By studying these forms, you will learn the coverage that is available through your specific flood insurance policy.
1. Dwelling Policy Form: This form is issued to the homeowners, the residential renters, owners of residential buildings (with two to four units) and owners of condominium units.2. Residential Condominium Building Association Policy (RCBAP) Form: This policy is issued to the condominium associations in order to insure eligible residential condominium properties.3. General Property Policy Form: This form is issued to the homeowners and lessees of residential condominium buildings or non-residential units/buildings that cannot be insured under the RCBAP.
The NFIP expired on May 31, 2010. However, the House Financial Services Committee Chairman has introduced legislation to extend the federal flood insurance program until September 30, 2010. The House Financial Services Committee has approved another bill, the Flood Insurance Reform Priorities Act 2010, which would reauthorize the program for about five years. Further, the bill would reform as well as increase the coverage limits of the National Flood Insurance Program. In the Senate, a bill has been filed to extend the program until December 31, 2010.
