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Residents Impacted by Flooding Face Insurance Questions
HARTFORD, Conn.-(Business Wire)-July 1, 2008 - As the Midwest battles some of the worst flooding in recent memory, insurance agents are busy answering questions about flood insurance - questions that are best addressed before a stressful situation develops. A recent Mason-Dixon poll revealed that one in five adults weren't sure whether flood damage was covered in their standard homeowners policy. And according to the Insurance Information Institute, only 17 percent of Americans said they have flood insurance. Both statistics underscore the benefit of an annual insurance policy review. Spending time with an agent can help clear up misconceptions about flood insurance.
Below, some of the most common myths are addressed, in part, with information from the Federal Emergency Management Agency (FEMA).
MYTH: A standard homeowners policy covers flooding.
FACT: Standard homeowners policies do not cover damage caused by flooding. You can, however, purchase a separate flood policy through The National Flood Insurance Program (NFIP). These policies are sold directly by the NFIP or through Write Your Own insurers such as Travelers.
MYTH: You can't buy flood insurance if you live in a high-flood-risk area.
FACT: You can buy National Flood Insurance regardless of where you live as long as your community participates in the NFIP. The only exception is in Coastal Barrier Resources System (CBRS) areas.
MYTH: You cannot purchase flood insurance immediately before or during a flood.
FACT: You can purchase National Flood Insurance at any time. However, in most cases, there is a 30-day waiting period from the date of application and premium payment before the policy takes effect. It is important to note that a newly effective policy will not cover a loss that is already in progress as of the effective date of that policy.
MYTH: You are not eligible for flood insurance if your property has previously flooded.
FACT: As long as your community participates in the NFIP, you can purchase a policy, even if your home or business has previously flooded.
MYTH: Federal disaster assistance will reimburse you for a flood loss so you don't need to buy flood insurance.
FACT: Federal disaster assistance is only available during presidentially declared disasters. Federal disaster assistance is often in the form of a loan that you must pay back with interest. Flood insurance policies pay claims whether or not a disaster is declared.
MYTH: If you don't live in a flood zone you don't need to buy flood insurance.
FACT: Everybody lives in a flood zone and you do not have to live near water to suffer a flood loss. Floods can be caused by many things such as heavy rain, melting snow, inadequate or overloaded drainage systems, dam or levee failure, hurricanes, etc.
"There's a lot of confusion about flood insurance. People either mistakenly assume it's covered in their standard homeowners policy or they don't think it's available. That's why we stress reviewing your insurance coverages annually with your carrier or insurance agent. That's the best way to learn about your insurance options and to make sure you have the right type and amount of insurance coverage," said Chantal Cyr, vice president, Travelers Personal Lines. "Unfortunately, many people find out too late that they didn't have proper coverage. That's why now is the time to make sure you're protected, not after a disaster strikes."
For more information about flood insurance, contact your independent insurance agent or visit www.floodsmart.gov.
About Travelers
Travelers understands that life and business are inherently dynamic and that the best way to serve agents, brokers and policyholders is to deliver insurance that evolves to stay in-synch with life and business as they change. For more information on being in-synch, visit www.travelers.com.
The Travelers Companies, Inc. (NYSE: TRV) is a leading property casualty insurance company selling primarily through independent agents and brokers. The company's diverse business lines offer its global customers a wide range of insurance coverage in both the personal and commercial settings, including auto, homeowners, construction, small business, oil and gas, ocean marine, surety and management liability, global technology and public sector services. Travelers is a Fortune 100 company, with 2007 revenues of approximately $26 billion. The company has more than 33,000 employees.
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