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In the of Wake of Colorado Flood Disaster, Protect Your Property and its Contents Now

Although Colorado is no stranger to flooding, many business and home owners have not realized they need two different types of insurance for protection. According to the Denver Business Journal, basic flood insurance policies through the National Flood Insurance Plan (NFIP) cover just structural and major equipment damage, so a separate policy is needed to insure the contents of the building, as explained in an interview with Carole Walker, Executive Director of the Rocky Mountain Insurance Information Association. (Denver Business Journal, Colorado businesses often don’t have enough insurance for flooding, September 13, 2013)

On July 6, 2012, Obama signed legislation that extends the life of the National Flood Insurance Program for 5 years. NFIP, which is administered by the Federal Emergency Management Agency (or FEMA), adds an extra layer of coverage. NFIP also covers homes in areas where private insurance companies refuse to provide any insurance coverage at all.

“In the event of water damage from flooding, the insured homeowner will have coverage up to the legal limits on his or her property. This is separate from homeowner’s insurance and many believe that flood insurance is included in a standard policy, but it’s not. It is a separate policy offered by NFIP,” says Frank N. Darras, America’s leading disability and insurance lawyer.

Our hearts go out to those in Colorado who have suffered devastating losses; it’s time for those who think this cannot happen to them to prepare. With hurricane season upon us, it’s important for business owners and homeowners to recognize that there is typically a 30-day waiting period from date of purchase before your policy takes effect.

Important facts for business and home owners:

  • Just a few inches of water from a flood can cause tens of thousands of dollars in damage. From 2007 to 2011, the average residential flood claim amounted to almost $30,000.
  • Insurance can only be purchased through an insurance agent, not directly from the federal government (even under NFIP).
  • Deductibles on your policy work the same way they do with auto insurance except that deductibles apply separately to building and contents (you pay different deductibles for each). The higher the deductible, the lower the premium you pay but you’ll also reduce your claim payment.
  • Flood insurance is only required in high-risk flood areas, but is strongly encouraged if you live in a moderate-to-low risk flood area. Nearly 20 percent of flood insurance claims come from low- to moderate-risk areas.
  • Flood insurance offered by NFIP can be purchased through most leading insurance companies. Rates are set and don’t differ from company to company or agent to agent. The main variables that determine rates include the date the home was built, type of construction of your home, and your area’s level of risk.
  • To find a local agent and assess your risk, visit FloodSmart.gov.
  • Remember to create and store digital photos or videos of your property to have evidence of the pre-disaster condition of both the inside and outside of your property. Document it by year and include all personal possessions, room by room, drawer by drawer and closet by closet and include garages and sheds.

What’s Not Covered:

  • Damage caused by moisture, mildew or mold that could have been avoided by the property owner.
  • Currency, precious metals and valuable papers such as stock certificates.
  • Property and belongings outside of an insured building such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs and swimming pools.
  • Living expenses such as temporary housing.
  • Financial losses caused by business interruption or loss of use of the insured property.
  • Most self-propelled vehicles such as cars, including their parts (see Section IV.5 in your policy).

Coverage is also limited in basements and areas below the lowest elevated floor. Make sure to check with your agent about these areas.

“When Mother Nature wreaks havoc on your life and finances, it’s tough to recover quickly. It’s important to have copies of your insurance policies with your agent’s contact information available in the hands of a trusted friend or relative, preferably in another location, so you can quickly report your losses,” says Darras.

Always get advice from a trusted agent or top insurance lawyer who can help you navigate the fine print and paperwork to ensure your property and its contents are covered.

DarrasLaw is Americas' most honored and decorated disability litigation firm in the country. Mr. Darras has seen more, evaluated more, litigated more, and resolved more individual and group long term disability and long-term care cases than any other lawyer in the United States.

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