Updated: Wed, 12/12/2012 - 01:00

In Sandy's wake: What you should know about flood insurance

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Homes in Fenwick Island, Del. are surrounded by floodwaters from Hurricane Sandy on Tuesday, Oct. 30, 2012. Officials said Fenwick Island and nearby Bethany Beach appeared to be among the hardest-hit parts of the state. (AP Photo/Randall Chase)  AP
AP
Homes in Fenwick Island, Del. are surrounded by floodwaters from Hurricane Sandy on Tuesday, Oct. 30, 2012. Officials said Fenwick Island and nearby Bethany Beach appeared to be among the hardest-hit parts of the state. (AP Photo/Randall Chase)
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Tybee Island homes floating out to sea. River Street businesses under water. Thousands of inland homes flooded beyond repair.

These scenarios may come to mind when imagining the damage a Category 5 hurricane could inflict on the Savannah area, but given the right conditions, even a powerful summer thunderstorm could cause devastating flooding across Chatham County.

In the wake of Hurricane Sandy, a Category 1 hurricane that was downgraded to a post-tropical storm by the time it slammed into the New Jersey coast on Oct. 29, it’s more important than ever to be prepared in the event of flooding.

Initial estimates put Hurricane Sandy’s economic impact at $50 billion. A large part of that total is the result of the devastating flooding in New York and New Jersey. Under the right circumstances, we could be dealing with the same kind of devastation in the Savannah area. That’s why it’s of the utmost importance to be prepared and have your home and business properly insured.

Homeowners and business owners need to know the critical importance and limitations of flood insurance. By understanding the following five issues, property owners can be better prepared in the event of flooding in the Savannah area.

Your house or business can flood even if you don’t live in a flood zone

If you’re counting on the Chatham County Department of Engineering’s detailed flood map to let you know if your home or business is at risk, think again. The county has several designations for flood zones, including the VE zone, a flood hazard area most likely to be devastated by flooding and prone to velocity hazards; the AE zone, an area with an average risk of being affected by coastal flooding; and the B, C and X zones, which are outside the designated areas that are likely to flood.

But living in an area designated as B, C and X doesn’t mean you’re off the hook.

It’s a common misconception that if you live in a B, C or X zone, you’re not going to flood. That’s simply not true. The water doesn’t know what zone you’re in.

Portions of Ardlsey Park, for example, are considered B, C and X zones, but many of those areas in the historic neighborhood have been known to flood, even as the result of strong summer thunderstorms.

Both homeowners and federal flood insurance are necessary

All homeowners and business owners with a mortgage are required to carry insurance. Though the mandatory property insurance protects against many hazards, it doesn’t cover flooding.

To protect against flooding, property owners living in designated flood zones are required to carry flood insurance through the Federal Emergency Management Association’s National Flood Insurance Program. Even those who don’t live in designated flood zones can carry a flood insurance policy through FEMA.

Several local insurance agencies work with FEMA to help coordinate flood insurance and can help consumers determine their insurance needs.

If a hurricane hits, you may be dealing with wind and flood damage. That’s why you need both a flood insurance policy and a homeowners policy. Your agent can help you find out how your policies work and how they can be tailored to work together.

Learn about your property before buying or making alterations

One of the most important steps a potential homeowner and business owner can take to protect his or her investment against flooding is to thoroughly evaluate the property’s flood risk before buying. Contacting an insurance agent beforehand can save consumers time and money in the long run.

Most flood policies are written on an actual cash-value basis.

The only exceptions are on condo association policies and the owner’s primary residence. Therefore, in most cases depreciation will be factored in when you file a claim. You need to be aware of the value of the property and the depreciation so you can be financially prepared if a flood strikes.

Homeowners should also contact their agents if they’re planning on making alterations to their existing property. For example, turning a bottom-level vented space into a living space can alter the stability of a home and adversely affect the flood insurance premium.

Beware: Federal flood insurance rates are on the rise

While many homeowners and business owners may feel secure knowing they’re insured through the Federal Flood Insurance Program, they need to face the facts: The program is financially strained and rates are going to increase significantly over the next several years. Consumers may not be able to change the outcome of rate increases, but they can be financially prepared.

You can buy additional flood insurance to protect your investment

Under the Federal Flood Insurance Program, homeowners can insure their homes for up to $250,000 for the property and up to $100,000 for the contents, while businesses can insure their property and contents for up to $500,000 each. But what if your home and business are worth more? Additional privatized flood insurance is available for those whose property values exceed the program’s standards. Insurance agents can help consumers determine how much additional coverage they require and what types of policies are best suited to their needs.

We’ve seen the devastation that Hurricane Sandy caused when it hit the East Coast. Even a Category 1 hurricane could do catastrophic damage to our area. Knowing the facts and having additional insurance can turn a nightmare situation into something more manageable.

You don’t have to lose everything.

Gwin Baker is a personal lines Account Manager at Bernard Williams Insurance and Financial Services. Baker can be reached at 912-234-4476 (ext. 3050) or gbaker@bwcco.com. Ryan Sewell is a commercial lines Account Executive at Bernard Williams Insurance and Financial Services. Bulldog fans may remember the Savannah native as a University of Georgia’s safety during the 2003-05 seasons. Sewell can be reached at 912-234-4476 (ext. 3056) or rsewell@bwcco.com.

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