Thursday, November 22, 2012

Flood Insurance: The Basics Everyone Should Know

In the world of home insurance, floods are quite the contentious issue. A home is not protected from a flood, even with a home insurance policy. Flood insurance does exist, but it operates completely separately from home insurance.

As flood insurance protects primarily the home from the damage that occurs as a result of a flood, it would seem natural for floods to be covered under a standard home insurance policy, but they are not.

Another problem with this division in insurance is that it is not common knowledge. Because the combination of the two types of insurance seems so expected, many people do not know that their home insurance does not, in fact, cover flood damage. They only find out when they file a claim for flood damage and it is denied because their policy does not cover such claims.

From of perspective of insurance companies, floods can be extremely costly and the damage is often extensive and difficult to repair. Obviously, this is also a problem for the customer who has to pay for these damages out of pocket.

Another issue for insurance companies is that floods are both seasonal and regional but to a greater extent than other natural disasters. Some regions flood annually while others flood sporadically. But almost all regions have the opportunity to receive the full force of a powerful flood.

Only some regions are prepared for these dramatic events in terms of the structural integrity of the home and the preparedness of the residents for such a disaster.

Different regions in the United States have their rainy seasons at different times, and even parts of the country that are known for their good weather have bouts of extreme rain which they are completely unprepared for.

However, there is a government program called the National Flood Insurance Program that works as a part of FEMA. The NFIP provides a basic but fairly comprehensive form of flood insurance. And for certain regions where floods are particularly prevalent and especially potent, flood insurance is required.

After Hurricane Katrina truly devastated parts of the South, namely Louisiana, flood insurance became more paramount but also more expensive because of all of the damage that was done.

But in the end of May of 2012, the authorization for the National Flood Insurance Program expires and is up for renewal in Congress. Unfortunately because of current political tensions, this program may not be renewed. To some people it is considered an additional ancillary and superfluous cost.

In 2005, the NFIP accrued massive costs because of the wreckage caused by Katrina, and its after effects. And now that every part of the country's budget and every expense is being scrutinized, every government program is being put under a microscope and their necessity is being questions.

But when floods are a constant problem and have the potential to cause horrible damage, a government program that helps clean up the wreckage and helps people recover seems to be a fairly necessary concept.

Be Prepared Even Before the Flood Comes

Each year, about 40% to 50% of natural calamities that happens all over the world is caused by floods. Just like earthquakes, floods take away thousands of lives due to the heavy waters, and can even wash away buildings, cars and trucks, and trees are even uprooted. It is apparent just how dangerous a flood can be. This is why disaster preparation is important to be able to survive a life-taking flood.

If you think that your location or the area where you live is prone to floods like houses located near streams or rivers, as well as those on the lower area of a slope and those with canals that are frequently blocked or clogged with garbage. One good tip to avoid experiencing floods would be to live where none of these are present like in higher places, a good drainage system and so on.

Houses located near rivers and dams, as well as those areas that have a poor drainage system and absence of trees are sure to have floods. In a situation like this, it really is important to have some disaster gear on the ready. This should include those flood essentials such as a life vest or a life jacket. Even if the water is still around the level of your ankle or knees, wear it ahead of time because water can increase at a rapid pace. It may be too late if you wear the life vest when the water is too high already.

You also have to prepare clothes that can resist the cold of the rain and the flood. Prepare jackets that can fight off the cold and has good ventilation. Pants or sweats, gloves, caps are also important. Towels are also important to dry yourself off. Protect your feet with boots to keep your feet dry in case you have open wounds that can be a possible entry for infectious organisms.

You also need some food in case you are stuck at the highest peak of your house because help hasn't arrived yet. Pack food that is good for 3 days to a week just in case it will take longer for you to be rescued. Water is also important so don't forget to store bottles of water, as well as foods that are not easily can last for a good number of days like crackers, canned goods and the like. A flood can quickly flush away your life if you are not prepared so make sure that you buy disaster gear beforehand so that you have everything on the ready when the flood strikes.

Friday, November 2, 2012

Flooding Help: Tips on Claiming Compensation From Your Buildings Insurance

The recent floods in the United Kingdom have left many households without a home due to flood damage. Over the past couple of years, the unseasonably high amounts of rainfall that have fallen in the summer months have caused a high level of disruption. In some cases a whole month's rainfall fell in just one day causing a serious amount of damage as river banks burst and torrents of water flooded settlements.

After such a traumatic experience, the unfortunate individuals must try to pick up the pieces and start re-building their lives. The first port of call will be generally the daunting task of approaching the insurance company and submitting an insurance claim. This requires them to provide relevant documents, which might have been destroyed by the flood. However, all is not lost.

Here are some tips on claiming compensation from buildings insurance:

Ensure that you create an organised list of all the items that sustained damage. This may include items lost or damaged within the property but also any structural damage sustained to the property itself.

It is very important to try and keep a photographic record that can be cross referenced with you full list of damages. The more extensive and detailed you can provide, the better your chances of receiving an improved payout from your insurance company.

It is also recommended that you keep the damaged items if possible because they may be required for assessment. In addition, if you can provide any documents that show evidence of purchase like receipts, bank statements or credit card bills, this can be crucial in your claim.

If any of your supporting documents such as title deeds, insurance papers or identity documents have been lost or damaged during the floods, you can always seek additional copies from relevant providers. Buildings Insurance companies will generally give you 180 days time to provide them with all the details. Take enough time you require and insure you have included as much information for the insurance company to carry out their job.

Remember to keep a constant record of any additional costs incurred. This will include anything from having to pay for temporary accommodation, buying new clothes through to any fees incurred in sourcing additional paperwork. Many Buildings Insurance Companies will provide alternative accommodation as a standard part of a flooding policy. It's always important to double check what you are covered before taking action to ensure you are not more out of pocket after this traumatic experience.

Flood damage is never an easy thing to deal with when it generally can cause such severe damage to our homes but this guide should help you take the right steps to overcome this difficult time.

Wednesday, October 31, 2012

Do You Really Need That Flood Insurance?

FEMA Elevation Certificates are used to determine if your house or structure is in a Flood Hazard Area. A lot of Mortgage companies are automatically putting Flood Insurance on houses that may or may not be in a Flood Hazard Area. We can file LOMA (Letter of Map Amendment) to the Federal Emergency Management Agency (or FEMA) on a case by case basis. FEMA will review each LOMA and determine if the structure is indeed out of the FHA and then send a letter stating so. This letter can be used to send to your mortgage company to eliminate FI which can be very costly. In most cases the Mortgage Company will only eliminate the Flood Insurance with an FEMA Certified Elevation Certificate and/or a LOMA.

Why has this become such an issue recently? Over the past few years, homes even outside of the Flood Hazard Area have been damaged or completely destroyed due to unprecedented flooding in some areas. If the home is destroyed by flood and the home owner doesn't have flood insurance, often times the mortgage company is left with the outstanding loan and no way to recover it.

Because of this, Mortgage companies are trying to require flood insurance. Having a FEMA elevation certificate can be the only way to get out of having to pay for expensive flood insurance when you really don't need it. Some areas carry more risk than others and having an elevation certificate can show reduced risk, and trigger the mortgage company to remove the requirement of flood insurance.

Flood insurance can cost from $750.00 per year up to $5000.00 per year and up from there depending on your property, your home value and your risk of flood. The only real way to determine how much risk you have is to get the FEMA elevation certificate and file the Letter of Map Amendment. In almost every case where insurance is require by the lender, the cost of a FEMA Elevation Certificate and LOMA filing is far less than the ongoing cost of paying for flood insurance that you may not actually need. Even if it is determined that you do need insurance, you end up with an accurate assessment of your risk, and that can in many cases save hundreds of dollars each year.

Being informed about these types of things when buying a home can save you a lot of money over the life of the loan. Don't just take what you are given and accept it. In most cases, lenders and insurance companies are motivated to first protect their investments and assets before they consider yours. Take the time to investigate, and make a good informed decision. Apathy costs consumers a lot each year, and knowing what steps to take to protect yourself is the first step to saving money.

Sunday, October 14, 2012

Protecting Your Assets Against Losses in Times of Calamities and Disasters

People are slowly recovering from the recent disasters that pummeled the island of Luzon and affected the populace. As I remember back then it have been raining very hard and almost all day and everything happening on those days were grounded to a halt with floods affecting the flow of traffic, schools and business establishments temporarily closed and people worried on their lives and properties on what to do next and how to get on their previous life on track again.

Floods, Typhoons and other disasters

Many of the known areas where flooded and a great majority of people got stuck in their second floor of their homes or at their rooftops for those living in bungalows. Local government units have mostly declared their municipalities, cities and provinces under state of calamity. These provinces and major cities are located in flood map areas of the country. It was good that the population and the government are prepared from these disasters in which Typhoon Ondoy served as a lesson for most of us and a basis on what things may come in the future with the rapid climate change and destruction, depletion of our natural resources and improper waste segregation and management in which we the ordinary people should be aware of.

Major government and non-government agencies come prepared and gone along way on their risk reduction and disaster management operation in the recent calamities after 2009 with faster response time. There have been some problems encountered during rescue and evacuation but still people living in the flood hazards zone are resilient and instead stay behind on their homes because they have sentimental value of the things they are going to leave behind and were just asking for relief goods other opted to temporarily evacuate on higher grounds or shelters provided by the local government units.

Typhoon Ondoy, the damage to property was estimated to be P6 billion, including P4.1 billion in damage to infrastructure, P1.9 billion in damage to schools, and P882.525 million in damage to agriculture. Meanwhile, Typhoon Helen and the southwest monsoon had incurred damage of more than P3.0 billion pesos worth of infrastructure and agricultural loss according to the National Disaster Risk Reduction and Management Council (NDRRMC) in September 2009 and August 2012 reports.

Our country, The Philippines, is no exception to natural and manmade disasters because it sits on the center path of major tropical storms coming in from the Western Pacific Ocean and more than 20 or so typhoons can come across our archipelago in a year and so the need for Non-life and life insurance is greatly needed in such times of needs.

What are Non-life insurance and Life Insurance?

To give you a brief background on Life and Non-life insurance, Non-life insurance is defined as insurance for property and casualty and is specialized on different categories in order to customize the needs of the policyholder.

Many non-life insurance companies can give different package from fortuitous events such Fire insurance to other allied peril insurance such as Flood / Typhoon, Earthquake in which these are specialized insurance products. They can also have extended coverage from Burglary, Valuable Items Protection, Riot, Smoke, and others that are offered from these non-life insurance. Sometimes these non-life insurance providers can also include life insurances package such as hospitalization, personal accident, and personal liability for those who avail this.

Life insurance on the other hand provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses

People think that insurance is just a waste of money but in can work a lot of ways of helping the policyholders in which insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss.

Other types of insurances are crop and livestock insurance (agricultural / aquaculture), motor vehicle insurance, mortgage redemption insurances (Real Estate) and many others.

Life and Non-life Insurance can both work hand in hand and could be a useful tool in protecting yourself against unfortunate events such as what happened a few weeks ago.

In choosing the right Insurances for your needs, the providing company must be registered and abide by the rules and regulation set forth by the Insurance Commission of the Philippines. The Insurance Commission's mandate is to regulate and supervise the insurance industry in accordance with the provisions of the Insurance Code in order to ensure that adequate insurance protection is available to the public at a fair and reasonable cost and to assure the financial stability of the insurance industry so that all legitimate claims of the insuring public are met promptly and equitably.

For those interested to avail of insurance, you can check out the website of the Insurance Commission if the insurance companies offering you are legitimate and also to better shop around and research first for the ideal insurance products that fits your need before selecting and deciding the right one for you.

Amidst the hardships and anxiety the resiliency and Bayanihan spirit still exists

It proves that "The Filipino Spirit is Waterproof" as what was circulated in the social media networks like Twitter and Facebook two weeks ago. The resiliency and spirit of helping others have been seen among ordinary citizens who are willing to risk their lives for others. The fortunate souls who were not affected were able to give the affected and those in need the help and relief with their unwavering support and gracious hearts.

It was also a time even in these disasters that people of various walks of life affected from this tragedy have high hopes and still learn to smile and be happy in order to cope up with the extreme weather conditions we are experiencing and eventually triumph from it.

CRB Benedict Baluyut, is a certified real estate professional with PRC Real Estate Broker's License No 8538. He is based in the City of San Fernando, Pampanga, Philippines and as an associate broker of C. F. Baluyut Realty and has been a lecturer on topics regarding real estate selling and marketing using the internet, other multimedia platforms or social networking.

Sunday, September 30, 2012

Home Insurance - What to Do If Your Home Is Flooded

The UK weather over the last decade has proved to be very unpredictable with a number of freak weather occurrences causing householders property damage including storms, floods and burst pipes during extreme freezing conditions.

So, if you are unlucky to be in the path of the unstoppable Mother Nature, what should you do if your home is flooded? Here are some before, during and after tips to help you during a potentially very difficult time.

If you are concerned about the threat of flooding to your home you need to make sure you have a flood plan in place to help you prevent damage to your home or in the event that a flood strikes, you need to be able to minimise damage and ensure the safety of your nearest and dearest and your most valuable possession.

Your flood plan checklist should include the following:-

Have a list of important contacts to hand, agree on where everyone in the household should go and how you will stay in contact with each other

Think about what you can move now - don't wait until water is entering your property as it will most probably be too late. If you are close to flooding, move items of personal and sentimental value to a safe place.

Prioritise other belongings if you have time - this can include ensuring electrical items and computer equipment is moved to safety and if you have time and it is safe to do so, move furniture upstairs if possible or the next best thing is to stack furniture as high of the ground as possible

Think about who will need your help most if it becomes an emergency situation - especially young children, the elderly and even vulnerable neighbours but ensure that you consider your own safety at all times

Locate your insurance details and check your policy cover

Know how to turn off your utility supplies such as gas, electricity and water

Prepare an emergency flood kit which might include a torch (with spare batteries), warm clothing (waterproof where possible), blankets, first aid supplies, bottled water and non perishable food items (including any supplies required for young babies and children)

Monitor local weather warnings on the news and sites such as the environment agency
If flooding is likely to be imminent, put your flood action plan into place ensuring:- 

Everyone's safety is top priority

Turn off electricity, gas, water etc

Move valuables and home contents if safe to do so

If you have a vehicle, move to higher ground if you have time before direct flooding

Evacuate the property as soon as possible

If anyone appears to be in any danger, alert the emergency services immediately

Check in on vulnerable friends and neighbours and don't forget about any pets


If you are aware of any local evacuation centres, get yourself and your family there as soon as possible
Flood water is very contaminated and in large volumes, fast flowing water can be very dangerous so avoid driving or walking in it where possible and listen to the advice of emergency services at all times.

For an area that is badly affected, it is common for the local council to provide evacuation centres which will provide some temporary shelter for you and even your pets if these can be restrained or kept in a suitable pet box (don't forget food for humans and pets if possible!)


When you are advised that it is safe to return to your property, be aware of dangers that may be lurking near or in your home such as bacteria (try not to come into contact with directly flooded property), sharp or dislodged objects and various types of structural damage. It is not recommended that children or elderly are allowed to enter the property following flood damage.

If you have not done so already, contact your Insurance company and notify your claim as soon as possible. During a flood situation, you are likely going to experience delays in getting through on the phone and it may take several weeks for a claims inspector or Loss Adjuster to attend due to high claims volumes.

If you do not have insurance cover, you should make contact with your local council for advice on assistance that may be available.

Do not initially attempt any major cleaning works and do not throw out any of your damaged belongings as these will need to be inspected when assessing your claim.

Stay away from wet electrics and do not attempt to fix any structural damage yourself as this will need to be properly assessed.
Assistance of specialist restoration companies will normally be provided by your Insurer and they will deal with everything from cleaning, strip out of damaged fixtures and fittings, sanitising, drying (which can take several months) and if you have contents cover, they will also fully assess the damage to these, restore what possible and for anything that cannot be restored, they will list these on an inventory for you and dispose safely - this inventory will then assist you with preparing your claim.

Buildings and contents cover will meet the costs of alternative accommodation during the period when the property is not habitable for living purposes so you should liaise with your Insurer / Loss Adjuster as soon as possible to discuss possible options. This might include:

Staying in a hotel on an emergency basis

Staying with friends / family (you should request a financial allowance for this)

Obtaining a short term rental property
A flood claim will generally go along the following lines:

Notification of claim to Insurers

Visit by Insurers appointed Loss Adjuster who will assess the damage and discuss alternative accommodation etc with you

If no issues with your policy cover, it is reasonable for you to request an emergency interim payment to help you purchase emergency items - this payment can be offset at a later stage from any agreed settlement. Any alternative accommodation requirements will be assessed early on.

Appointment of specialist restoration company to deal with cleaning, drying (buildings cover) and assessment and disposal of contents (contents cover)

If the property was badly saturated, it may take several months to dry - a restoration company will then provide a drying certificate

Prior to completion of drying, your repair estimates will be reviewed and authorised if in order or if you opt to use an Insurer approved Contractor, this will be authorised. If your claim is large in value (approx £20,000 or more), it is likely that a Surveyor will be involved in the process of obtaining tenders and overseeing repairs - these costs will be met by your Insurer.

f you have contents cover, you will need to provide a full detailed list of items that damaged beyond repair; for larger value items (say over £300), you are likely going to have to provide original receipts / replacement estimates where possible

When the property has been restored, your alternative accommodation will cease and you can move back home
During your insurance claim, you should keep a record of all activities including dates and times and if in any doubt at any stage, check with your Insurer / Loss Adjuster and do not proceed with anything until you are satisfied that they are going to pay for it.

Disputes can commonly arise with flood claims - these can be due to disputes over costs / values, policy cover understanding or you may experience unacceptable levels of service, especially during high claim volume situations. If you want your claim to go as smoothly as possible, you need to understand what your policy covers, how to deal with common disputes effectively and how to submit an effective complaint in the event that you are unfortunate enough to experience problems.

Thursday, September 13, 2012

What Happens When the Flood Insurance Runs Out?

Nobody can predict precise weather patterns and especially rainfall intensity. The result being that as Climate Change bites and the seasons merge, a large percentage of UK property owners, domestic and commercial, will potentially be at risk in multiple ways.

Some need flood insurance under strict contract, lease or occupational licence terms. Others that have flooded before will need continuing insurance for both peace of mind but also to ensure the value of their castle is not diminished. Those of us who are simply cautious will need to understand what has happened, what might happen and decide what stance they will next take when they start to think about their next housing investment.

House values could easily fall if an effective and believeable solution is not brokered very quickly now. If the solution is vague on detail and fails to allay purchaser suspicions then bid prices will fall and many peoples brick-and-mortar investment will be in tatters. Value will go down the drain, not just rainwater.

Therefore we come full circle and must begin to self-help ourselves and not rely on good luck and sometimes generic Risk Analysis Reports. Such help starts with using our own eyes but must become a little more sophisticated compared to now.

The Government are not yet releasing details of the post June 2013 answer to the current serious flood dilemna but it seems they are proposing something like this --- Creation of an Insurance POOL to pay claim sums over an agreed top level sum; this may only apply to domestic housing and it may be funded by a levy on all insurance premiums - any claim over the pool reserve amount would be met by Government.

Self-help would start with potential buyers thinking twice about deciding what homes to consider buying. Frankly Developers still constructing new homes on known flood plain land areas is unacceptable unless substantive flood defence works are scheduled to finish very shortly (before June 2013).

Secondly Surveyors and Valuers, those advising home buyers, should distinguish between Flood and Flood Plain risks on the one hand, fairly well documented and usually tabulated in local Environmental Risk Analysis Reports completed on each conveyance, and a visual risk assessment on the other hand.

The latter would further define if exceptionally high rainfall could cause a flash flood risk. Questions like (1) is the road-system at a higher level that the home plot? (2) is storm water taken away from the area, or stored locally or in soakaways? (3) can any storm drains be seen around the estate/district? (4) is the subject home in a dip, or at a low point in the terrain? (5) is the subject home designed/constructed in such a way that flash flood risk is reduced or not? etc...

The Surveying and Valuing industry need to work together to establish a clear set of common-sense visual assessment matters that need careful Surveyor intrepretation OR Valuers will simply assume the worst and down-value the home as adequate loan security. This would be catastrophic for Sellers who could see their investments fall in value or become virtually unsaleable.

Personally I am designing my own self-defence policies and protocols for use on behalf of my own clients but is my industrial Regulator, the Royal Institution of Chartered Surveyors, and the Insurance industry in general going to help me, or not. Watch this space but above all HELP YOURSELF by thinking about flooding and not just pretty wallpaper and are the walls cracked.

Stuart K. Parrett is a residential property expert in England: he is a registered Valuer, expert witness and a fellow of the Royal Institution of Chartered Surveyors. He operates both PROinspect Consultancy and Inspection4 Ltd for Hampshire County and all-England home surveys (and much more) respectively.