The common understanding of the Flood Insurance.
The National Flood Insurance policy (NFIP) allows some deductibles when there is a situation of a flood. The value of the items at the time of the flood is also of great importance, and thus the policy owners should be aware as to how these are measured. There are two types of insurance coverage:
- Building Property – $250,000
- Personal Property- $100,000
Flood insurance is known to cover losses that are caused by excess, forced water in the property. When you get a flood policy, you must keep yourself updated with the kind of policy that you have and how much losses are covered by them. The policies generally pays the actual damages or the policy limit whichever is less, and thus if your property is totally destroyed and you have limited coverage changes are you will have to bear the rest of the losses.
The flood Insurance deductible amount varies with the cost of the policy. The deductible starts from $500 and may go up to $5,000 which is for the structure and the content. Thus, choosing the deductible in the insurance policy is an important decision. Choosing a higher deductible will lower the premium that is to be paid, but that will also deduct the claim payment. The building property and personal property generally allows different deductibles. It is also be applied separately to the claims. There are minimum limits of the deductible amounts and thus the mortgage companies may have variations in them. The information on the deductible should thus be thoroughly checked mentioned on the declaration page of the NFIP.
Flood Damages and their values
The flood claims are calculated either on the AVC or the RCV. The replacement cost value as the name suggests is the cost that would be needed to repair the damages made to the building. The RCV is the cost without the depreciation, but the conditions that are required for this claim are that the building should be the principal place of the resident and it should be occupied by a single family. 80% should be a part of the coverage in the policy for the owner to get the losses recovered as a part of the Insurances plan. The Actual Cash Value is the replacement cost of the property damaged minus the value of its physical depreciation. The personal properties are valued on AVC. When the property is at risk then it may be eligible for the FEMA mitigation grant for property improvement if it fulfills the required criteria. The property must be prone to flood risk for at least two times and the combined payments made on the claims are more than the value of the property.