Flood Insurance and Water Damage Bountiful

Posted by on Feb 14, 2017 in Uncategorized | Comments Off on Flood Insurance and Water Damage Bountiful

Flood Insurance and Water Damage Bountiful

Noahs_ArkIt is no surprise that few members of the Everyone Forever Now Blog reading community know that a regular home owners insurance policy usually will not cover water damage Bountiful if said water damage was caused by a flood. It is true and it it is important to be aware of this fact if the house that you own is located on a flood plane or some other area that could potentially be impacted by a flood. If your house is damaged by a flood and you do not have a separate flood insurance policy you may be liable for all the costs associated with cleaning up and or fixing the damage that was caused by the flood.

DO NOT WAIT UNTIL AFTER YOU SUFFER WATER DAMAGE BOUNTIFUL TO GET A FLOOD INSURANCE POLICY

There are many reasons¬†why most home owners insurance policies do not cover damage that was caused by a flood. The most important reason is because flood damage is too great a risk to underwrite. When a flood happens it destroys many properties in the same area. Many insurance companies write property insurance policies in specific areas. Because of these reasons insurance companies are reluctant to cover this risk because although the chance of a flood actually occurring is ¬†rare, when it does happen it could be too much for the company’s financial reserves to cover.

For this reason flood insurance policies are typically separate policies from a home owners policy. Moreover, flood insurance is almost always underwritten by the U. S. government under the national flood insurance program. The reason why the U. S. government is in a better position to underwrite these policies is because (1) it will be dealing with a larger pool of policy holders which spreads the risk better and (2) the U. S. government has access to a larger pool of cash and would not potentially be put out of business the way an insurance company might.