As a Houston, Texas Farmers insurance agent I frequently get questions about flood insurance. Here are eight reasons to consider getting flood insurance:

1) Your homeowner’s insurance policy does not cover flood damage. One of the main reasons people get homeowners insurance is for protection against a loss from fire. In Texas you are far more likely to have flood damage than fire damage. Flood insurance is valuable coverage for one of your most important assets.

2) Everyone lives in a flood zone. (According to the FEMA website.) In other words there is no such thing as a home that can not be flooded.

3) Even an inch or two of water can cause very costly damage to your property.

4) Federal disaster assistance is normally a loan that you must pay back with interest. This is not a good substitute for insurance.

5) It is easy to get flood insurance. You can get a quote and order a policy on the internet or by phone. This often takes less than 15 minutes.

6) In the event of a flood disaster it is far better to be one of the people with flood coverage!

7) With this insurance your family will have less to worry about when a big storm is in the news.

Flood insurance is generally inexpensive. Listed below is a chart for consumers that qualify for the preferred residential program:

Contents Only

$8,000 $61 per year

$20,000 $116 per year

$40,000 $146 per year

$60,000 $166 per year

$80,000 $181 per year

Home and Contents Combination

Building-Contents-Cost

$20,000 $8,000 $112 per year

$50,000 $20,000 $180 per year

$100,000 $40,000 $233 per year

$150,000 $60,000 $264 per year

$200,000 $100,000 $317 per year

Not everyone will qualify for the preferred rates. If you would like to get flood coverage consult with a good insurance company and get details and a quote. Customers in Texas can get more information at my Texas flood insurance site. Or you are welcome to call my office at 281-537-2700.

Insurance is best described as cover against any given risk. Small businesses require such cover because, accidents are bound to happen at any one given time. When you go to the insurance broker, you will be made aware of all the different policies that relate to small businesses. Paying premiums is not the ultimate guarantee that the insurance company is going to repay you once the enterprise is hit by some crisis.

For example, the insurer, or the insurance company for that matter, cannot repay the enterprise for losses incurred through lack of proper management of the venture. However, it may repay if the losses are as a result of fire, if this is what the premiums were for. The company will pay up to a specific amount that is calculated based on the worth of the enterprise and the premiums that the enterprise commits towards the insurance policy.

Some of assets that can be insured in the venture include the buildings. Note, however, that you can only insure them if you are the real owner of the premises. Rented or leased building cannot be insured in the name of the enterprise. In the case of lease, your landlord should be the one to provide this insurance cover. Property that belongs to the enterprise also need to be insured. These include desks, tables, chairs and equipment.

Some of the risks that a small business can insure against include fire, floods and earthquakes and loss of income for the employee. Loss of income for employees may occur through disability acquired during the call of duty. This means that you need to have an insurance policy for workman compensation in case of injury at work.

Whether you are a physician, dentist, attorney or other white-collar worker, protecting your future earnings and quality of life is important. Disability Income insurance is the most commonly used form of income protection for white-collar professionals. Although some consumers have made, and will continue to make, the mistake of purchasing Disability insurance based on price, it is especially important that young professionals look to the provisions used in their Disability Income contract rather than just pricing.

The financial stability and security of an insurance company has always been important. After all, people purchase insurance policies in good faith, believing that the insurance carrier will be capable of paying a claim when it is needed. However, in the days of the financial crisis and credit freeze, it has become even more important for consumers to be aware of the guarantees that an insurance policy truly provides.

When looking into Disability insurance, young consumers should be aware of the renewability provision that they purchase. The two key terms you want in a Disability Income contract are Non-cancellable and Guaranteed Renewable. This means that your policy cannot be changed by the insurance carrier, under any condition, so long as the premiums continue to be paid on time. This is the only way of guaranteeing that you do not experience an unexpected price increase in the future.

Consumers purchase Disability Income insurance to protect their future ability to work and earn an income to provide for themselves, provide for their family, and maintain a certain quality of life. Many people purchase their Disability policy thinking that they will never use it and that it will only be needed until their mid 50s. The reality is however, that a person’s 50s are sometimes the years they most depend on their income. These are typically the years where children are in college and not always working. A 54-year old parent, paying college tuition, a mortgage and saving for retirement is likely to depend more on their paycheck than a 26-year old working and living at home.

Having a Non-cancellable and Guaranteed Renewable Disability insurance policy can prevent an adult who greatly depends on their income from having to drop his/her Disability insurance because of an increase in premium, when the protection is still very much needed. Although most of the major insurance carriers selling Disability insurance have never increased their premiums in the past, smaller carriers and many association programs have.

If you are taking the time and spending the money to buy a Disability Insurance policy to protect your income and future, be sure to do it carefully and cover as many potential problems as possible. Find an experienced agent who can truly help you understand the many provisions and benefits available in today’s market.

Nobody knows when floods happen. These are natural disasters that can just strike when we least expect it. We may live in deserts or atop a mountain and still experience flooding.

In fact, 50 states have reports of flooding. The reason behind this is that hurricanes or tropical storms are not the only causes of natural flooding. Flooding inside homes can also be due to the flash flooding and rising river water.

In layman’s terms, flooding is the combination of mud and water in an area. So if the water is not wet on a normal basis but it still combines these two elements, then there is still the possibility of flash flooding taking place.

What does flood insurance cover? This is a question practical people ask. They know that it is a necessity for any homeowner.

It protects their assets and saves them from additional costs just in case flooding is something they have to include in their problems.

The coverage depends on the kind of plan your insurance company offers you. There is a definition that you should know. If you live in a 100-year flood plain, this does not mean that flooding in your area will just occur once in a 100 years.

In fact, a lot of people ask What does flood insurance cover when they are in a 100-year flood plain. They don’t know whether they should get an insurance or not because of this.

The solution to this confusion is to look at the flood maps in order for them to know whether the location of the home puts the homeowner at a risk when it comes to flooding.

The homeowner should know the kind of flood plain that the risk level he is in with the area that he is residing.

So after discovering the cost of flood insurance, the next question for homeowners is What does flood insurance cover. Well, imagine that there are a lot of factors that should be looked upon.

Flood insurance covers a percentage of the damages cost depending on the following factors. They look at the coastal policies of the client. For example, living along a coast gives the insurance holder a high premium.

In this scenario, the question to what does flood insurance cover is lower than people who are residing in an area that rarely gets wet.

As accommodating as insurance companies are to people who are looking for flood insurance, they still have to make a business and the coverage of an insurance policy really depends on the possibility of the area taking place.

The higher the possibility of this happening and the higher the flood insurance means the less coverage in actual cost.

We all want to stretch our wallets. If we can get something at a cheaper price but receive the same benefits, we do it. If we want flood insurance, we try to get cheap flood insurance. As long as we get the same benefits from the general flood insurance cost, we go for less.

If you reside in an area that is prone to flooding, you should definitely get it. Imagine the flood ravaging your home. Imagine how much you have to spend for damage control. Imagine the cost of replacing what you lost. Buying flood insurance is the best option for any homeowner.

Home insurance does not cover flooding so if you can get cheap flood insurance, do so. This can protect you just in case flooding takes place in your area. You have to evaluate your assets and then get a policy plan that is available for you.

The first thing you should do is to check with your state agency. There are some states that have requirements when it comes to buying one. They can offer you cheaper policies if you live in an area that has a bigger chance of flooding.

There are states that initially provide the insurance policies at a cheap rate because of the possibility of flooding in the area and the homeowner really has no choice because flooding is a tragedy that one cannot avoid.

Before you sign up with any insurance company, you should check your Preferred Risk Policy. This is an affordable insurance that is an option for you if you are thinking of getting one like that.

The name of the policy that you are getting depends on the state that you are living in. If it so happens that the state you are living in is prone to flooding that the other states, then the chance of you getting cheaper plans is more likely.

Ignorance is something that should be avoided regarding this matter. Know as much as you can when it comes to flooding areas and flood zones and flood coverage and rates.

You can learn these from your insurance company as well as the National Flood Insurance Program which mitigates your state to assist you just in case the disaster does happen in when you are living.

Another thing you should remember is to not be overwhelmed when you are inquiring about flood insurance. If you want to get cheap flood insurance, then you can compare one insurance policy to the other. You can do this by visiting their websites and also talking to the insurance agents.

“…Isn’t that the insurance company’s job?”

This question has been posed to me often through-out my career. The quick answer is “No” but let me explain why.

Although some companies will provide appraisals on a side-by-side basis with the dreaded “Loss Prevention Inspection”, most companies don’t. The onus to ensure your property is valued correctly always lands back on you. That is a big responsibility for most business & building owners because if you’re like me, you’re the expert at what you know, not what you don’t. As a business owner you’re busy building your widgets, running your business, selling your mouse traps or doing whatever it is that you do. So unless you are involved in the contracting/construction industry on a daily basis, you probably have only a slim, if not no idea what it costs to replace that building you own.

In recent years, building costs have increased significantly. It is with this in mind that I strongly urge all my clients that own buildings (of any type) to review the limit that is carried on their property to make sure they are insured for full “Replacement Cost” value.

There are a number of resources that can be utilized to determine the replacement cost value. The best method is to contract the services of a qualified appraiser. A listing of appraisers can be found in your local yellow pages. I recommend to my clients to do this exercise every 3-4 years.

Why so often?
As recently illustrated to me in a “Construction Cost Index” that was sent to me by one of the insurance companies my brokerage represents, over the past 3 years the average cost of construction has risen approximately 35% in Canada. In major centers & cities that are “booming” it can even climb much higher than the average. In rural area’s there could additional costs for transportation of the materials & additional labour costs.

This means that if in 2005 your building was worth $1,000,000 it’s now worth at least $1,350,000. The cost of a $1,000 appraisal* doesn’t sound too bad compared to a possible $350,000 loss out of your pocket in the event of a total loss. Even in the event of a partial loss there could be costly disadvantages to being under insured (see my article on Co-Insurance).

To add to the mounting evidence, re-construction costs are even higher than regular construction costs because of the added expense of factors like debris removal & complying with by-laws (i.e.: set backs, sprinkler systems, construction material, easements, etc) that might not have existed when your building was originally constructed. So make sure your appraiser is local & well versed in the city by-laws that exist to ensure nothing gets missed.

*Check with appraiser for actual costs as it varies depending on a number of factors.