By Anessa V. Cohen
The New York State Realtor magazine has provided extensive details about flood insurance and how to determine what is covered and what is not, together with the new flood maps that came out over the summer. Although the majority of its information has been derived from various FEMA sources, its summarization of what is qualified and what is not was so concise, that I decided to reprint the lists so they can be cut out and put aside—hopefully to collect mothballs somewhere rather than be used, but there nonetheless.
Flood insurance protects two types of insurable property: building and contents. The first covers your building; the latter covers your possessions. Flood insurance does not cover the land you occupy. It is important to note that homeowners’ insurance does not cover floods.
Flood insurance covers residential buildings up to $250,000 and non-residential up to $500,000. Contents coverage can be purchased up to $100,000 for residential buildings and $500,000 for non-residential.
According to FEMA, building coverage includes the insured building and its foundation; the electrical and plumbing system; central air-conditioning equipment, furnaces, and water heaters; refrigerators, cooking stoves, and built-in appliances such as dishwashers; and permanently installed carpeting over unfinished flooring.
Contents coverage includes clothing, furniture, and electronic equipment; curtains; portable and window air conditioners; portable microwaves and dishwashers; carpeting that is not already included in property coverage; and clothing washers and dryers.
The following are not covered by flood insurance:
• 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 a 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 insured property.
• Most self-propelled vehicles such as cars, including their parts.
According to FEMA, the two most common reimbursement methods for flood claims are replacement cost value (RCV) and actual cash value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to within 80 percent of the building’s replacement cost.
All other buildings and personal property (i.e., contents) are valued at ACV. ACV is the RCV at the time of loss minus physical depreciation. Personal property is always valued using the ACV.
There is typically a 30-day wait period for flood insurance to become effective, but this is waived if the building is in a Special Flood Hazard Area and the mortgage is obtained from a federally regulated or insured lender. Coverage in excess of the federal limits may be purchased through other insurance companies. Residents of non-participating communities may purchase coverage from private insurers. v
Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker and a licensed N.Y.S. mortgage broker with over 20 years of experience, offering full-service residential and commercial real-estate services (Anessa V Cohen Realty) and mortgaging services (First Meridian Mortgage) in the Five Towns and throughout the tri-state area. She can be reached at 516-569-5007 or via her website, www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa.cohen@AVCrealty.com.