10 Things to Look For When Choosing a Flood Insurance Agency
Did you know 13% of properties in New Jersey have a 26% chance of being severely flooded? Flooding is the costliest natural hazard in the United States, as it can tear apart your home or property.
Think about the roof, foundation, sanitation, and structural damages flooding can cause. In a worst-case scenario, your property may be completely ruined.
If you live in high-risk flood zones, you need good flood insurance. Knowing you can recover from flood damage will give you peace of mind.
If you are looking to buy a flood insurance policy, you may be uncertain of the factors to consider. Here at ten important things you should factor in when choosing a flood insurance agency.
1. Your Flood Risk
There are many misconceptions around flood risk assessment. Every home or property is at risk of flooding. Risk differs depending on landscape, terrain, location, and property structural development.
If you stay in high-risk flood zones, you can evaluate where your neighborhood falls. Using tools like a flood insurance rate map, you can review your flood risk.
Your flood risk guides your decision on coverage and premium. High-risk zones attract higher premiums and more coverage.
2. The Flood Insurance Agency Certification
There are over 5000 insurance companies in the United States. With the many alternatives, choosing the right flood insurance agency is daunting.
You need a reliable insurance company with legal certification. A policy with an insurance agent who has no legal certification is not legally binding, so you may end up draining your monthly premiums to a non-existent firm.
It’s common for people to ignore insurance company certification. However, it should be the first thing you check before anything else.
The States of New Jersey offers an online list of licensed insurance carriers. It is your responsibility to do due diligence to avoid dealing with fraud.
3. Type of Coverage
The reason for buying a flood insurance policy is to protect your valuables. You need to understand what coverage the insurance agency offers.
If you are looking for coverage that protects your building and its content, the coverage should match that. Among the important items you need to have coverage for are:
• Structural damage
• Electrical and plumbing system
• Window blinds and doors
• Foundation walls, anchorage systems, and staircases
• Detached garages
• Fuel tanks and solar energy equipment
You need to identify what your insurance agent is offering. It is even better if the flood insurance agency can customize the coverage to match your needs.
4. The Claims Process
You should check the insurance agency claim settlement ratio. A claim settlement ratio tells you the percentage of insurance claims settled by the insurance company relative to total claims.
Insurance agents with low CSR are signals for trouble. These insurance companies look for every opportunity not to compensate.
Besides the CSR, you need to understand the claims process. How long does it take to get compensation? What are the procedures and damage evaluation process?
5. Premium
On average, US homeowners pay $700 for a flood insurance policy. The ratings may differ depending on coverage and the company.
You need a flood insurance agency that matches your financial strength. Review the monthly premiums and other additional charges. Your target should be to get affordable flood insurance that covers your needs.
Remember, if you default on the monthly premium, you may lose coverage. Your premium package should align with your income.
6. Brand Reputation
You need to conduct a reputation audit on the prospective insurance agency. Analyze how the company relates to its customers.
Brand reputation suggests how the company is perceived in the market. Some insurance agencies are associated with poor customer service or failure to pay insurance claims.
Your goal is to understand the reliability of a flood insurance agency. An insurance company with a good brand reputation shows efficiency in operation and services.
7. Financial Strength
Everyone with insurance wants to be certain that the insurer can pay claims. Floods caused by rains or ocean waves may affect an entire community. You want an insurance agent that will compensate you even when disaster hits.
So, how do you check your insurer’s financial strength?
Review the company’s ratings from reliable rating companies. You can request financial statements from your agent.
In financial statements, analyze profitability ratios, liquidity ratio, solvency, and valuation ratios. If you are unsure of how to review financial strength, consult a lawyer to assist you.
8. Exclusions
In South Jersey, many factors may cause a flood. The risk factors include:
• Heavy rainfall
• High tides and waves
• Dams breaking
• Melting snow and ice
Flood insurance policies offer coverage depending on the causes of the flood. For instance, some flood insurance agencies don’t cover hurricanes.
You also need to understand what your cover does not include. This helps you avoid disappointments and lengthy legal procedures during the claim process. Exclusions for currency, precious metals, and property outside the insured building are common.
9. Customer Care Support
Floods are unpredictable and you don’t know when they will occur. Such hazards require a high response rate to help protect your valuables in good time. You need to consider the reliability of the customer care service.
Some questions you should ask yourself include the following. Is the insurance company open 24/7? How long does the agency take to respond to an emergency?
A reliable insurance company should respond to your emergency call quickly. Look for this when seeking a flood insurance company.
10. Customer Reviews
Customer testimonials tell you a lot about the flood insurance agency. Assess online reviews, as well as family and friends’ experience with the company.
Be careful on the sites in which you check online customer reviews. Some companies post their own reviews to present a positive brand image.
Choose A Competent Flood Insurance Agency
Protect your home or property from flood risks and damages. Buying a flood insurance policy will not protect your home from damage, however, it will offer you financial security when the unexpected happens.
You sleep better if you know you have a safety net if the worst happens. Don’t wait for a rainy day to safeguard your home. If you are looking for a reliable flood insurance agency, contact us to learn more about your options.