Flood and Earthquake Insurance

Flood and Earthquake are separately written coverage forms for which additional premium is charged. They buy-back standard exclusions for these perils found in virtually all Homeowners and Commercial Property policies. Many property owners have no interest in purchasing these protections because their properties are not located in a Flood or Earthquake Zone.

The National Flood Insurance Program (NFIP) is administered by the Federal Emergency Management Agency (FEMA). FEMA, in conjunction with local jurisdictions, has designated certain areas as flood zones which require the local jurisdiction to develop an approved storm water management program. In return for these local efforts, FEMA will underwrite Flood Insurance for properties which are located in 100-year Flood plains. Visit FEMA’s web site (http://msc.fema.gov) to learn more about whether your property is in a Flood Zone. Building owners applying for federally-backed mortgages are required to have flood insurance if they are located in a 100-year flood plain. Many private insurance companies are licensed to issue and service FEMA-backed flood insurance policies.

It is important to note that “flood” as described in the exclusions found in standard Property and Homeowners policies includes rising waters from rivers, streams and lakes as well as coastal storm surge. And although some courts have liberally granted coverage for storm surge driven by “wind” (a covered peril), it is clearly not the intent of these policies to cover damage resulting from rising waters.

Earthquake coverage is of primary concern in California. The law in California requires insurers who write residential property to offer earthquake coverage. They can either manage the risk themselves or they can participate in the California Earthquake Authority (CEA) program. You may visit their web site (http://www.earthquakeauthority.com) for more information.

Agents who write property coverage for their clients are expected to advise them if they are candidates for Flood or Earthquake insurance and they should provide a quote or referral, in writing, in order to meet the minimum Standard of Care.

Hiring an Earthquake Insurance Expert or a Flood Insurance Expert Witness can help you dot the i’s and cross the t’s in your important insurance contracts. Call Mike Sapourn today for knowledgeable and friendly help.

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