The National Flood Insurance Act was created in 1968 to protect home and property owners in flood-prone areas.

Although home owners in designated flood zones may have purchased NFIA insurance protection for physical damages incurred directly from what the Federal government defines as a flood, the coverage includes listed property only and does not extend to particular losses that include:

• earth movement – even earthquakes, landslides, land subsidence, sinkholes and erosion that are caused by floods
  
  
• loss of use or access to covered property
  
  
• temporary housing while property is being rebuilt or repaired
  
  
• business interruption losses
  
  
• lawns, trees, shrubs, fences and other property that is not inside of the structure
  
  
  

Why You May Want to Consider Private Flood Insurance

While earthquake and other earth movement-related insurance may be something to investigate across the board, when it comes to losses caused directly by flooding, there are further options. Accessible to homeowners as well as business owners, private flood insurance is attractive for those that have coverage through the NFI due to the comparably low limits that are provided in the national program.

In the event an insured property has actual cash value or replacement cost that exceeds the NFLIP limits, excess flood insurance would be something to explore. Moreover, since the NFLIP does not provide coverage for fiscal losses like business interruption and additional living expenses, standard flood insurance could be the coverage solution.

To sum it up, it’s important for all home and property owners to be aware of their status in regard to the federal definition of a flood-prone area. If you reside in a place designated as a flood zone, purchasing the national flood policy should be a priority. In addition, care should be taken to assess the policy to see if related limits and coverage are adequate for your needs.  

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