|
A flood of problems
|
 |
March 13, 1997: 7:09 a.m. ET
Homeowners without flood insurance can pay a hefty price
From Correspondent Donald Van de Mark
|
NEW YORK (CNNfn) - For the past two weeks, flood waters have torn through the Midwest, killing more than four dozen people and damaging at least 80,000 homes.
The tragedy cements the status of floods as the No. 1 natural disaster in the U.S.
To make matter worse, only one-quarter of the 10 million households at high risk are covered by flood insurance, leaving most homeowners vulnerable. (QuickTime Movie 431K)
"Unfortunately, too many people rely on their homeowners insurance, believing that it will cover damage caused by floods. In fact, 99 percent of home policies sold in the U.S. do not cover floods," said Todd Muller, of Independent Insurance Agents of America.
Federal relief is available only if the president declares the damaged area a disaster, which happens in fewer than half the flood cases. Even then, the relief usually comes in the form of low-interest loans.
All flood insurance, though, is backed by the U.S. government. The rates and coverage are standardized. No need to shop around, most agents, as well as the government, sell it.
"Unlike medical coverage, there are no pre-existing conditions when you buy flood insurance," Janet Bamford, the author of "Smarter Insurance Solutions," said. "You can sign up for it even if you've been flooded. The caveat is, it doesn't take effect for 30 days, so you can't wait until you see the weather report."
The average premium costs $300 a year for $100,000 of coverage. Those who don't live in flood plains pay less and are encouraged to buy, since nearly 30 percent of claims come from low-risk areas.
Whatever your insurance, all homeowners should document their belongings.
"The easiest way to make an inventory of your home is to walk around with a video camera and throw open closets, videotape the basement, the garage, and all the places where you have things," said Bamford. "That can help you prove that you owned these things and they were in good condition."
Most potential hazards to your home, including fires, tornadoes, and hurricanes, are covered by homeowners policies. Earthquakes and floods are the only disasters requiring separate insurance.
(QuickTime Movie 1M)
|
|
|
|
|
 |
|
