What is it?

A flood policy covers various items and aspects of the insured party. The most obvious thing that it covers is the water damage that may happen to the floors and the foundation of the home. The coverage also protects the vital systems inside the home, such as the electrical system, plumbing system, and HVAC system. Some policies may also cover the personal items that belong to the insured person.

Therefore, it may pay for clothing, appliances, electrical items, jewelry, artwork, and the like. Certain policies may not cover items that were stored in the basement or crawlspace areas because of their vulnerability. Policies differ depending on the location and the insurance company. An insured person may also have a feature on his or her policy that pays for hotel rentals while the flood damages are being resolved or repaired.

How does it work?

The way that a flood policy works is quite simple. The covered person has to pay a premium each month just to stay covered under the policy. That premium pays for a certain amount of benefits to cover any accident that may occur. The individual will have to call in a claim if something happens. At that point, he or she may have to pay a deductible, which is usually a small “good faith” payment. The insurance company will pick up the expenses once it validates the claim and confirms that the deductible has been paid.

Major benefit

Peace of mind is undoubtedly the main benefit of having flood insurance. A person who lives in a flood-prone area is probably worried continuously that a flood may occur. This special coverage allows such an individual to feel secure that everything will be fixed even if the worst situation possible occurs. Peace of mind is worth every penny.