Residents of Tennessee affected by the recent floods can attest to the value of having a flood insurance policy. This infamous 1000-year flood devastated much of the central and western portions of this state and was responsible for 31 deaths and $2.3 billion in property damage. Most homeowners insurance policies have exclusions for flood damage, so the only way to get coverage is by supplementing your home insurance policy with a policy provided through the National Flood Insurance Program. When you start searching for quotes, the low cost of flood insurance may surprise you.
Recent Tennessee Flood Insurance Facts as Reported by FEMA
- There are currently about 33,000 flood insurance policies in effect in this state.
- Less than 2% of TN residents have flood insurance coverage.
- TN residents filed 553 flood insurance claims in recent years.
- These claims resulted in $11.8 million in compensation paid to policyholders.
- That equates to an average of about $21,340 per claim.
Why Do Residents of Tennessee Need Flood Insurance?
According to estimates reported by FEMA, as little as 2 inches of floodwater in a 1,000 square foot home can result in as much as $10,000 in damage. If you experience flooding in your basement, you may need to replace appliances, such as your furnace and hot water heater. You may also notice problems with structural damage or may need to pay for expensive mold removal. If your home does not have a basement, as is the case with many of Tennessee’s manufactured and mobile homes, or if floodwaters rise to aboveground floors, your damage will be far more expensive.
Damage to flooring, electronics, furniture, and other property can add up quickly. In fact, FEMA reports that the average paid flood insurance claim is approximately $35,000. Some people feel that a flood insurance policy is not necessary because, if disaster strikes, FEMA will step in to provide assistance. What they do not realize is that aid offered by FEMA comes in the form of low-interest loans that they must repay to the government. FEMA assistance is in no way a substitute for a flood insurance policy.
What Is the National Flood Insurance Program?
In the late 1950s, many American homeowners faced the dilemma of not having flood coverage. Most home insurance companies had stopped covering flood damage because the costs were too high and because there was no such thing as a flood insurance policy. A major flood had the potential to destroy an entire community, and those who suffered major damage often went bankrupt. Seeing the magnitude of this problem, the U.S. Congress created the National Flood Insurance Program in 1968. Flood policies offered through this program have the backing and guarantee of the federal government.
Although this program operates at a loss, it has saved this country billions of dollars in potential bankruptcy claims since its inception. If you live in a participating community, as most Americans do, the government cannot turn you down for a flood insurance policy, even if you live in a high flood-risk area. Furthermore, your rates will not increase because you have filed a claim. Rates for these policies are standard across the country. The government bases your rates exclusively on your flood risk as determined by FEMA-drawn flood maps and on the amount of coverage you purchase.
What Coverage Does Flood Insurance Provide?
Flood insurance policies backed by the NFIP are available to both individuals and business owners. Whether you are purchasing a personal or business policy, you will have to option to buy one or two different coverage types: structural coverage and contents coverage. Most homeowners opt to purchase both, while renters will only need contents coverage and landlords may only want structural coverage:
- Building coverage: This coverage reimburses you for the costs associated with repairing damage to your home or building’s structure. When insuring your home, you can purchase up to $250,000 in building coverage; if insuring a business, you can purchase up to $500,000. This coverage protects the following:
- the building’s foundation
- all plumbing and electrical systems
- heating and air conditioning units (excluding portable units)
- all built-in appliances
- permanently installed carpeting over unfinished floors
- Contents coverage: This coverage reimburses you for the costs associated with repairing or replacing lost or damaged property you keep within your home or business. Individuals can purchase up to $100,000 in contents coverage, while business owners can purchase up to $500,000. This includes coverage for the following:
- furnishings, artwork and other décor
- clothing, jewelry, and other accessories
- window-type air conditioners
- portable appliances
- for businesses: merchandise and inventory
- carpeting and flooring installed over finished floors
It is worth noting that flood insurance does not provide coverage for contents kept in a finished basement. Flood insurance does cover appliances regularly kept in the basement or structure of underground spaces.
Get Flood Insurance Quotes from an Agent in Tennessee
Although the federal government offers and backs flood insurance policies, you must purchase your policy through a qualified insurance provider. Securing a flood insurance policy for your home or business is easy with the help of an insurance agent in our network. These independent agents can help you assess how much coverage you need and can provide you with information and quotes for various levels of coverage.
Contact an agent in or near your Tennessee neighborhood to get more information and to start reviewing your flood insurance quotes.