Don't Let Your Largest Investment Wash Away: South Carolina Flood Insurance
Most of South Carolina is a major area for potential flooding, especially along the coast. Some of the greatest amount of money spent for recovery in South Carolina by private and government disaster relief agencies comes from the fact that many people do not purchase flood insurance for their homes. This results in house damage for which homeowners cannot receive compensation since regular home insurance policies do not cover flood damage. Even though South Carolina homeowners who live in a flood plain or flood prone area should purchase flood insurance the Federal Emergency Management Agency notes that almost 25 percent of flood damage claims come from homeowners in minimal flood areas. Here are the particulars concerning how to go about purchasing flood insurance. Flood insurance for homeowners can only be purchased from the National Flood Insurance Program (NFIP). Flood insurance covers losses to your property caused by flooding. From structural and mechanical damage to flood debris cleanup and flood surfaces (like tile and carpeting), your investment is protected by a flood insurance policy. Flood insurance is actually issued through a private South Carolina home insurance underwriter but the flood insurance policy is backed by the NFIP. If any portion of your structure is in a flood zone, you will be required to purchase flood insurance by your bank or mortgage lender. There is also a 30-day waiting period from the time a flood insurance policy is purchased to when it actually goes into effect. Since this is the same waiting period as with home insurance hurricane coverage, South Carolina coastal residents without flood insurance protection for their home should purchase flood insurance at least 30 days prior to the beginning of the hurricane season June 1. 80 percent of all natural disasters involve flooding and those along the low-lying coast of South Carolina are particularly susceptible. The Federal Emergency Management Agency (FEMA) has placed many South Carolina communities into a category of flood zones. 56 of 203 South Carolina communities that are NFIP participants are considered to be in a flood zone. Flood insurance premium rates are determined by the risks of flooding in the area where your home is located. To indicate the risks in different parts of the country, FEMA has assigned a character from the alphabet to each zone. The major zone categories are V and A, which have the highest risk of flooding. V zones are located in coastal areas of South Carolina and A zones are located near rivers, streams or lakes. Older maps list B and C as minimal-risk zones, but those characters have been phased out and relabeled as X zones on new flood maps. If you happen to be one of a number of South Carolina homeowners whose house is located in a designated flood plain, the risks are even greater. A flood plain is the lowland adjacent to a river, lake or ocean. Flood plains are designated by the frequency of the flood that is large enough to cover them. Flood frequencies, such as the "100-year flood," are determined by plotting a graph of the size of all known floods for an area and determining how often floods of a particular size occur. Even FEMA statistics show that the average South Carolina home is six times more likely to be damaged by flood than by fire over the course of a 30-year period, which is usually the standard amount of time for an average home mortgage. In flood prone areas of the Palmetto State, the risk of flooding is 26 times greater than fire damage. You can find out if your home is located in a flood plain or what federally designated flood zone it occupies. The information can be obtained from your local town or city hall or county administration office where employees responsible for issuing building permits in your area have access to flood zone maps. If you are buying a home, any South Carolina realtor or insurance agent should be able to help you. The average flood insurance premium through the NFIP currently is $370 annually. The NFIP is funded through flood insurance premiums, not through tax dollars, as are claims and operating expenses. About 200 South Carolina insurance companies, possibly including the company that already handles your home or auto insurance, write and service flood insurance policies for the federal government. There are currently approximately 161,000 flood insurance policies in force in South Carolina out of over 2.2 million homes located in the Palmetto State. Only about one-quarter of the homes in areas most vulnerable are insured against flood loss. The average flood insurance premium starts at $112 per year for those who live in FEMA designated low to moderate risk area for flood and are eligible for a Preferred Risk Policy discount. Those that live in high flood risk areas can pay an average of $450 per year in flood insurance premiums. Flood insurance policies are available in three forms: "Dwelling" (most homes); "General Property" (apartments and businesses); and "Residential Condominium Building Association Policy" (condominiums). All flood insurance policies have limits on coverage. It is also important to remember that if you don’t have flood insurance coverage on your South Carolina home, you are running a risk in more than one way. Monies from the Federal Emergency Management Agency to help disaster stricken areas are not always forthcoming. Plus, affected homeowners can have an opportunity to request rebuilding funds from FEMA only if the president declares the area an emergency disaster area. Many times smaller flooded areas never receive that designation. As a South Carolina homeowner, you can purchase flood insurance that will protect your home up to $250,000 and its contents up to $100,000. Flood insurance will cover a renter’s belongings up to $100,000 and a condominium (considered non-residential) property owner can insure his building and personal possessions up to a half-million dollars. Businesses can also buy up to $500,000 in coverage for the structure and contents. However, some South Carolina home insurance companies are willing to expose themselves to higher risks and take on flood insurance policies in some of the developed barrier areas of South Carolina. Instead of $340 in premiums offered through the NFIP, a few private companies will charge about $3,000 a year for flood coverage of slightly less than $200,000. When your insured home is in extreme danger of being flooded, you may receive up to a $1,000 reimbursement for your damage-preventing expenses. The flood insurance policy allows for items such as rental storage space to protect your belongings, buying sandbags and lumber to make a barricade, and renting pumps that qualify for reimbursement. No deductible is applied to this coverage. If your home sits between the mainland and often-stormy ocean waters, you might not be eligible for federally subsidized NFIP insurance. The federal government limits its liability by excluding property owners in selected areas of South Carolina. The reason stems from the Coastal Barrier Resources Act, which is designed to protect wildlife living in valuable ecological areas. The government discourages development by withholding subsidized insurance for South Carolina property owners in those areas. A recent FEMA study also reported that close to 87,000 homes and buildings have been built across the U.S., including several areas in South Carolina, on land likely to wash away during the next 60 years. Since the federal government sets the rates for flood insurance, private South Carolina insurance companies that sell flood insurance make their profit from service fees allotted by the NFIP. When comparing insurers, one question to ask is how quickly are claims resolved? A company in poor financial health may not be able to pay its claims as promptly as a prosperous company. Tips on choosing a good insurance company to underwrite your South Carolina flood insurance coverage include: When writing flood insurance policies, companies tend to focus on specific regions. Unisun, for example, provides coverage to homeowners from Virginia to Texas. Other major flood insurers, such as Bankers Insurance Group, write policies throughout the country, but are not considered national providers. State Farm, Allstate, Mutual of Omaha, and Travelers are also examples of companies that write in South Carolina and nationally. If you live in and own a home in South Carolina, flood insurance is very important. Don’t run the very real risk of flood waters washing away your South Carolina home; look into flood insurance. National Flood Insurance Program
South Carolina flood prone areas
Average flood insurance costs and availability
Flood insurance available coverage
Certain South Carolina flood insurance exclusions
Picking a flood insurance company
Additional information regarding flood insurance
