In November 2000, Hawaii residents experienced Tropical Storm Paul, one of the worst floods in recent history. Floodwaters caused more than $90 million in damage throughout the state, damaged nearly 300 homes and destroyed 33 others. Although the federal government provided assistance, those without flood insurance at the time suffered large financial losses. Floods can happen anywhere and at any time in this state. If you are not already covered, you may want to look into reviewing flood insurance quotes so you can protect your property with valuable flood coverage.
Hawaii Flood Insurance Facts as Reported by FEMA
- As of Sept. 30, 2013, there were 59,876 flood policies in effect in HI.
- Less than 15% of the households in this state have flood insurance coverage.
- Hawaii residents filed 265 flood insurance claims between Oct. 1, 2011 and Sept. 30, 2012.
- These claims resulted in about $12,995,000 in compensation paid to policyholders.
- That equates to an average of about $49,000 per claim.
Why Do Residents of Hawaii Need Flood Insurance?
Flashfloods strike an average of eight times a year in this state and can happen anywhere on the islands. Additionally, residents are at risk for flooding caused by tropical storms, hurricanes and even tsunamis. If your home or business is flooded, you stand to lose a lot due to property damage. In fact, according to FEMA, as little as 2 inches of floodwater in a 1,000 square foot home can cause up to $10,000 and the average paid flood insurance claim is approximately $35,000.
A surprisingly high number of people mistakenly believe that their home or business insurance policy covers flood damage, but, except in very rare cases, it does not. There is also the misconception that if FEMA declares your state to be a federal disaster area due to flooding, FEMA will cover the costs needed to repair damage and replace property. While FEMA does provide financial assistance, it comes in the form of guaranteed low-interest loans that you must repay to the government.
A basic flood insurance policy starts at under $150 a year. Having coverage is far more affordable than paying back a FEMA-provided loan if a flood damages your home or business. If your home or business is located in a designated flood zone, your mortgage lender will require you to carry flood insurance, otherwise it is optional. But keep in mind that 25 percent of all flood insurance claims are for properties located outside of flood zones.
Who Provides Flood Insurance Coverage?
In most cases, when you go to purchase insurance coverage, you will want to compare rates from a number of different providers. However, if you wish to insure your home or business against flood damage, you are limited to purchasing a flood policy available from the National Flood Insurance Program, or NFIP.
The U.S. Congress created the NFIP in 1968 in response to a problem that was plaguing home and business owners: namely that their insurance policies excluded flood damage. Prior to the introduction of flood insurance, an overflow event could lead homeowners into bankruptcy.
Between 1978 and 2013, the NFIP paid more than $48.1 billion in flood insurance claims. Rates for this coverage are standard across the country, based entirely on your flood risk and the amount of coverage you are purchasing. The government cannot deny you flood insurance coverage because your home or business is in a designated flood zone, nor can they raise your rates because you have filed a claim.
What Coverage Does Flood Insurance Provide?
Individuals and business owners in Hawaii can purchase flood insurance. You have the option to buy structural coverage only, contents coverage only or both. This makes coverage more affordable for landlords, renters and condo owners who only need one type of coverage. Most traditional-home owners purchase both coverage types:
- Structural coverage: This compensates you for the costs associated with repairing flood damage to the structure of your home or business. Homeowners can purchase up to $250,000 in structural coverage, while business owners have a higher limit of $500,000. This provides coverage for:
- the foundation of the home or building
- plumbing and electrical systems
- all built-in appliances
- air conditioning and heating units (except portable units)
- permanently installed carpeting over unfinished floors
- Contents coverage: This compensates you for the costs associated with repairing or replacing personal or business property lost or damaged by floodwaters. Individuals can purchase up to $100,000 in contents coverage, while business owners have a higher limit of $500,000. This provides coverage for:
- artwork and other décor
- clothing, jewelry and accessories
- computers, televisions and other electronics
- merchandise and inventory (if insuring a business)
- portable appliances (built-in appliances have protection under structural coverage.)
- carpeting and flooring installed over finished floors
Keep in mind that flood insurance does not provide coverage for contents kept in a finished basement. If your basement floods, you can only receive compensation for losses to items listed under structural coverage.
Get Flood Insurance Quotes from an Agent in Hawaii
Although the government provides and backs flood insurance policies, you can purchase a policy only through a qualified retail insurance provider. Securing flood insurance quotes for your home or business is easy with the help of an independent insurance agent in the Trusted Choice® network. These agents can help you assess how much coverage you need, they can provide you with information about how much you can expect to pay for different levels of coverage and they can secure quotes from various providers for your review.
Contact a Trusted Choice agent in or near your neighborhood to get more information and to start reviewing flood insurance quotes.