September 12, 2018

Think your National Flood Insurance Program (NFIP) policy has you fully covered? Think again.

In my early days as a public adjuster, I worked with a grizzled old pro who was a leading flood adjuster.  He once concisely explained to me the basic purpose of NFIP flood insurance:

 “The point is to get homeowners some relief – it’s not supposed to make you whole.”

 I’ve been thinking about that pithy summary as Hurricane Florence barrels towards the East Coast.  Forecasters are calling Flo a “once in a lifetime” storm that might hit the Carolinas with torrential rain, high winds, and a deadly storm surge that could uproot trees, cripple power lines, and dump more than 3 feet of floodwater in several coastal areas.

If you run a business or live anywhere near this area, you’re no doubt asking yourself one key question: Am I covered?

 You may not be fully covered if you only have a flood policy through NFIP.   In residential policies, the coverage limit for a single family residence is $250K for the structure and $100K for personal property.  The maximum coverage limit for businesses is $500K for the building and $500K for your business personal property.

 This is important to understand because, in my experience, people who buy a flood policy through NFIP think they have comprehensive flood insurance.

 This is a myth!

 In fact, these policies are not only limited by dollar values but also limited in what is covered.  NFIP policies are limited when it comes to damage that is below-grade – that is, related to flooding.  These policies mainly cover unfinished drywall, insulation, mechanicals, plumbing, electrical but not paint, wallpaper and flooring.

 So, if you have a policy through NFIP, read through it very carefully to understand what is covered and what is not.  If you want full flood insurance protection, you will have to purchase a complementary policy through a private insurance provider – it may be costly depending on the location of your property.  It will be worth it, of course, in the event of major flood damage.

 But if you only have a flood policy through NFIP, give it a good read and understand what it actually covers. Remember: it’s only supposed to help you get you back on your feet – not make you entirely whole after a flood loss.

Diane Swerling

Diane Swerling is a Principal at Swerling Milton Winnick, and current Vice President of the Massachusetts Association of Public Insurance Adjusters. She has particular expertise in claims involving condominium associations and commercial policies.
If you’ve had a fire, flood or other property loss resulting in an insurance claim, and need a public insurance adjuster in Massachusetts, New Hampshire, Rhode Island, New England or anywhere in the U.S. or Caribbean, call Swerling Milton Winnick. We are the oldest and largest public adjusting firm in New England, and our team of experts will give you personalized, 24/7 attention to successfully resolve your residential or business insurance claim.