Flood: Understanding and Recovering from One of Nature's Worst Disasters



...contents or “other than household contents” but not both. This could produce a problem for people who have a business or office in their home unless they obtain separate coverages for household contents and business property at the same location.

A problem may occur with property that can be considered as either household or business property. This should be discussed with agents or underwriters in advance to determine how such property should be treated.

When not insured under the building coverage, any of the following items are covered under personal property: kitchen appliances, air conditioners, carpet, and outdoor equipment and furniture stored inside the insured building. A limit of insurance is imposed collectively on artwork, rare books, jewelry, watches and furs. Antiques are paid based on functional value (with property that serves the same function). Where there is any substantial value to such items, separate coverage, possibly under an inland marine floater that includes flood coverage, should be arranged. Up to 10 percent of the personal property coverage (but not as additional insurance) can be applied to tenant’s improvements and betterments to the building.

Debris Removal Coverage

Expense incurred to remove debris off, on, or from the insured property caused by flood is covered by NFIP policies. This includes debris from the insured’s property on or away from the premises, and other debris brought onto the insured property by flood.

Payment for this and the property coverages cannot exceed the total coverage limits for the property insurance.

Increased Cost of Compliance Coverage

This coverage reimburses the insured for compliance with a state or local floodplain management law or ordinance affecting repair or reconstruction of a structure suffering flood damage. Compliance activities eligible for payment are: elevation, flood proofing, relocation, or demolition (or any combination of these activities) of a structure. Specifically excluded from this coverage is loss due to any ordinance or law that the insured was required to comply with before the current loss.

Special Coverages

Flood policies provide temporary coverage for property that has been moved to another location due to the threat of flooding. This coverage applies for 45 days, and there is a modest limit for the incurred costs. To be covered, personal property must be in a fully enclosed building above ground level, or otherwise reasonably protected from the elements. Note that this extension of coverage applies only to property threatened by flood — not to flood damage to property...

“The NFIP does not provide coverage for business interruption, extra expense or additional living expenses. However, if a business is large enough and can afford the additional premium, extra coverage — including higher policy limits — for flood losses can be purchased from a private insurance company.”