Flood.
Earthquake.
Tornado.
Sinkhole.
While we can’t prevent a natural disaster, we can prepare and attempt to protect property and possessions from the forces of Mother Nature.
If you only read one line on this page, read this: Homeowners insurance does not cover flood!
Flood insurance is available through only 60 insurance companies who participate in the National Flood Insurance Program (NFIP) in 22,000 communities across the US. Oak Ridge is one of those communities. Flood insurance covers overflow of inland water (lakes, rivers); pooling or runoff of surface water from any source (rain); collapse of land along a body of water due to wave or water currents; and mudflow. Yes, mudflow – if your house is on a hill, you may still need flood insurance!
In fact, the NFIP reports that more than 20% of their claims come from outside the high-risk areas. Federal assistance may only be available to those without flood insurance if the president declares a disaster. However, that assistance is not free – it comes in the form of either a USBA loan (which must be paid back) or a FEMA disaster grant (which averages about $5,000 per household). In addition, many people do not meet the strict eligibility requirements, so they do not qualify for either option.
The average flood insurance claim is around $30,000.
Keep in mind, there is typically a 30-day waiting period for coverage to begin after a policy takes effect. A flood policy covers the building, its foundation, electrical, plumbing, heating & air systems, hot water heaters, appliances, permanently installed carpeting, etc. Contents coverage can also be purchased. Premiums are based on the property location, so high-risk areas will have higher premiums while low to moderate risk areas may qualify for the Preferred Risk program.
Earthquakes happen in our area more often than anywhere else in the US! Most are small, but in 1973, Maryville had a 4.7 magnitude quake and in 1913, Knoxville had a 5.9. Earthquake coverage is not automatically included in a Homeowners policy, and some insurance companies do not offer the coverage at all. After an earthquake occurs, there is typically a waiting period before coverage can be purchased. The deductible is typically a percentage of your dwelling or building limit.
Tornadoes are becoming more common in Tennessee. Since 1979, tornado alley seems to be moving eastward, and one report puts Tennessee in the top 4 of deadliest states for tornadoes. In 2002, a tornado devastated the Mossy Grove community in Morgan County. Our area often experiences high winds that down power lines and cause significant property damage. Many insurance companies now offer a separate wind/hail deductible on property policies, with a choice of either one deductible for everything or a higher deductible for wind/hail.
Sinkhole coverage is available on property policies in Tennessee – some companies automatically include it while others will add it for an additional premium. Limestone makes up a lot of ground beneath East Tennessee soil, and it is quick to erode with water.
Typically, sinkholes form so slowly that little change is noticeable, but they can form suddenly when a collapse occurs. Such a collapse can have a dramatic effect if it occurs in an urban setting.
usgs.gov
Discuss your risk potential and options with your insurance agent before another disaster strikes!
Our agents are happy to review your policy and confirm your coverage. Give us a call at 865-483-8483.
Content used by permission from original article written by Cyndi Jeffers, CIC, Commercial Lines Specialist at Herron-Connell.
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