After the Floods

Recent hurricanes Harvey, Irma and Maria did a lot of damage. As in A LOT of damage. According to Moody’s Analytics, the total cost of property damage and lost economic output after the three storms may be $195-245 billion when all is said and done. Other sources, such as AccuWeather and The Guardian, estimate the cost will be even higher—$300 billion or more.

A large percentage of the property damage in residential areas was caused by rain and storm surge. But many homeowners weren’t covered for flooding. For instance, only 15% of Harris County residents (where Houston is located) and 20% of those in Corpus Christi had flood insurance when Harvey hit.

Those percentages are not unusual compared to other locations across the nation. So why don’t more people have flood coverage? Typically, the answer is cost. How much does flood insurance cost? For those in low-risk areas, it may be an additional $500/year on top of their regular homeowners insurance rates. Not bad, right? For those in low-lying coastal areas, however, flood premiums can be an additional $5,000/year or more on top of their regular premiums, and this for pretty basic coverage.

Most people purchase flood insurance through the National Flood Insurance Program (NFIP). This program is subsidized by the government to make flood insurance more affordable, but the maximum amount of coverage you can purchase to rebuild or repair a home is $250,000. You can also buy up to $100,000 to cover your home’s contents, excluding any furniture or other belongings in basements, which are not covered at all. In addition, NFIP offers no coverage for expenses incurred while residents are unable to inhabit their homes, or for features or items outside the home like trees, decks or swimming pools.

For consumers who live in high-value homes, these coverage levels are clearly too low. This is where Kelly Klee can help. Our private client insurers offer flood insurance that is superior, both in terms of coverage limits and breadth. Here are some of the features you can buy:

  • Full Replacement Cost (including for secondary homes)
  • Higher Limits (up to $15 million or more for high-value homes)
  • Additional Coverage for Basements (where floods are likely to cause more damage)
  • Special Coverage for Precious Possessions (such as art, collectibles and jewelry)
  • Additional Living Expenses (should your home be uninhabitable for a period of time)
  • Property Removal (to move belongings off site if a flood threatens)

Kelly Klee’s insurers also offer white-glove service, from the claims experience all the way through to final repairs. Claims are approved quickly and for the full amount needed to rebuild or repair (up to coverage limits). You can also get assistance finding the reputable tradespeople or specialized craftsmen needed to restore your property to the same state as it was before a flood.

For average homeowners, the NFIP offers a safety net that can keep them from losing everything. But it’s not enough for those with homes that are worth more than $500,000. If you fall into that category, Kelly Klee would be pleased to do an expert analysis of your homeowners insurance needs and get you a quote. You can reach us at 844.885.1600.

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