In countries like India, with a diverse geography, huge population and different regions, there is a higher frequency of natural disasters. You often hear of landslides, Tsunamis, cyclones and especially floods during the monsoons. These floods, besides damaging infrastructure, can also wreck your home and personal belongings.
With a standard fire and special perils insurance, you do not have to bear the spiralling adverse financial consequences of such occurrences. With the standard fire and special perils insurance you can claim for reimbursement not just in case of floods, but also fire, cyclones and many other perils. Your home is probably your most asset. It is only obvious that you would like to keep it protected in every possibly way you can. Your best bet is to get a wide coverage offering home insurance.
What is the need for flood insurance?
It is not every day you make a home and it takes a lifetime of hard work, saving and investments to have the home of your dreams. With various factors being a threat to your home, a home insurance policy helps in securing it against damages due to many factors. Flood insurance is helpful and necessary to keep your home protected from water-related damages to your home and its structure.
No matter whether you live in a flood zone or you don’t, it is important to consider including it in your comprehensive home insurance policy. Floods can affect anywhere and at any time. Due to heavy rains, excessive snow or just a natural disaster, flood water can wreck any home. But not all home insurance cover damages to your property and belongings due to floods. And hence, you must check with your insurer or purchase an additional standard fire and special perils insurance that includes flood insurance.
Understanding flood insurance and how it works
Flood insurance is sold as a separate insurance policy or as a part of standard fire and special perils insurance to offer coverage to your home from damages due to floods. With a standard fire and special perils insurance you can keep your home – both the structure and its contents, protected from the adverse effects of flooding along with other natural and man-made disasters like lightning, storm, explosion, riot, burglary, and many more.
Why should you buy flood insurance?
Purchasing standalone flood insurance could be an ideal choice for flood-prone areas as losses due to floods are not covered in a traditional home insurance policy. Many private insurers offer flood insurance as a part of the standard fire and special perils insurance or as an additional coverage you can buy along with your homeowner’s insurance policy.
Does flood insurance have a waiting period?
When you purchase a flood insurance policy, it comes with an initial waiting period before it gets active. While the duration of the waiting period may vary, it is typically a 30 day period.
What is covered in standalone flood insurance?
Flood insurance comes with two different kinds of coverage:
- Dwelling coverage: This is the most vital part of your flood insurance and cannot be waived off. It offers financial coverage from damage due to floods to the basic structure of your home, including its attached structures and built-in appliances, if any.
- Contents coverage: This coverage offers coverage to personal belongings that include your clothing, jewellery, home décor, furniture and other important things as per the policy terms. This coverage is optional and can be opted for if one is willing.
What is not covered by a standalone flood insurance policy?
Just like home insurance, standalone flood insurance also comes with certain exclusions. These are:
- Damages caused mould, mildew and moisture that could be prevented
- Damages caused by mudslides or other earth movements
- Damages to external structures like landscapes, patios etc
- Additional living expenses due to relocating
- It also does not cover internal water damages like burst pipes etc.
Is home insurance not enough?
Home insurance offers protection from a wide range of damages, including water damage leaks and other plumbing issues. But it does not cover damages due to natural occurrences like floods if it is not combined with a standard fire and special perils insurance.
While flood insurance is needed only in specific situations and maybe a rare circumstance, it is still a small investment to secure your home against the fear of flood-related damage. Here are some reasons you should consider buying flood insurance as a part of standard fire and special perils insurance:
- You live in a flood zone, and you have an ongoing home loan: If you reside in a flood prone area Loan providers require you to purchase flood insurance.
- You live in a high-risk zone: Using various mapping tools on Google, you can check the risk factor in your area. If you think flooding is likely, having flood insurance is worth the investment. It is also important to note that flood insurance may have a waiting period, so you must not wait for a storm or a forecast before purchasing the flood insurance policy.
- You cannot afford the cost of repairs: Even if your home is not in the flood zone, you cannot eliminate the possibility of a flood. If you think you cannot afford to get your home repaired and replace your valuables, you must invest in a flood insurance policy with your home insurance.
While there are numerous inclusions in a home insurance policy, buying a standard fire and special perils policy offers various added inclusions and factors you can be secured from. Given that climate conditions of our country can become unpredictable and there are parts of the country that witnesses heavy monsoons, which can easily turn into a natural catastrophe like flood, it is best recommended to stay covered under a robust standard fire and special perils insurance policy. Even if you do not live in a flood-prone zone, buying flood insurance is a small investment for peace of mind.