By Oklahoma Insurance Commissioner Glen Mulready
The U.S. has just experienced two significant hurricanes, leaving trails of destruction in their wake. Some of the hardest-hit areas are hundreds of miles inland and nowhere near the coast, with one profound impact: flooding. This scenario has happened in Oklahoma several times, where a hurricane or tropical storm moves in from the Gulf of Mexico and brings significant rainfall. The convective storms we see in the state usually carry a flood risk, too. With flood at the forefront of our minds, I want to give Oklahomans an overview of flood insurance.
Considering a flood insurance policy before the next storm is critically essential. A standard homeowners policy does not typically cover floods; most flood policies have a 30-day waiting period. You can purchase a flood policy through the National Flood Insurance Program (NFIP), which FEMA manages, or through a private insurer.
Flood insurance covers losses directly caused by flooding. Coverage options and amounts vary from insurer to insurer. As an example, NFIP flood policies contain two types of coverage:
Building Coverage
- Building coverage includes structural damage or damage to plumbing and electrical systems. It can also include large and built-in appliances, HVAC systems, permanently installed cabinets, and, depending on the policy, detached garages.
Contents Coverage
- Contents coverage encompasses personal belongings such as clothing, furniture, electronic equipment, curtains, washers, dryers, portable and window air conditioners, microwave ovens, and carpets not included in building coverage.
A common misconception about flood insurance is that it’s only needed when required by your bank or mortgage company, but consider this: more than 40% of NFIP claims come from outside the high-risk areas. Floods are also one of the costliest types of natural peril. Just one inch of water can cause $25,000 in damage. FEMA provides a flood map tool that shows if you live in or near high-risk areas, but floods can affect any property.
One of the most common questions about flood insurance is how much it costs. The answer varies. Premiums are calculated based on multiple factors, including the risk of flood, the type of coverage, the deductible, the amount of coverage, the location of your structure, the design and age, and the location of your structure’s contents. The NFIP provides a detailed list of these considerations in its Rate Explanation Guide. Typically, coverage can cost around $500 a year and up but can save you thousands in the event of extensive damage.
With the recent storm activity and more storms on the horizon, flood insurance could be the key to protecting you and your home. Talk to your agent and explore your flood options today. To learn more about flood insurance, visit oid.ok.gov/flood or floodsmart.gov.
