Excess flood insurance

When to Consider Additional Flood Coverage

When residing in areas more prone to floods, residents often assume that the protection offered by the National Flood Insurance Program (NFIP) is sufficient to get a residence or commercial building back up and running. They do not realize the limits put on the NFIP when it comes to reimbursement. Having a full understanding of the limitations of the NFIP will likely help residents to realize that excess flood insurance is necessary to avoid any major pitfalls that can arise from a lack of the appropriate amount of coverage.

The NFIP covers only up to $250,000 of building coverage and up to $100,000 of personal property while requiring a total of $20,000 for a deductible for residences. For commercial buildings, there is a $15,000 deductible and up to $500,000 coverage but no compensation for the businesses during the rebuild time when they are unable to be open for business. Excess flood insurance covers commercial buildings so the rebuild time does not bankrupt a business. It also assists in compensation for residential customers to find additional housing while awaiting rebuild time of their property. Commercial and residential risks are covered when the appropriate amount of coverage is obtained.

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