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Get to know flood insurance

Coloradoís weather is getting warmer. Instead of snow, storms will bring rain and an increased risk for floods and flash floods. According to the Insurance Information Instituteís website, 12 percent of American homeowners had flood insurance policies in 2016, which is down from the 14 percent that had policies in 2015. About 10 percent of Colorado homeowners have flood insurance policies.Matt Inama, an agent with State Farm Insurance in Black Forest, said it is no surprise that so few people have flood insurance policies in the state. ìThere are probably only a few places where you really need to get flood insurance,î he said.According to, the legal definition of a flood is ìa general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.îInama said it is important to understand that regular homeownersí insurance policies do not include flood insurance. ìFlood insurance only comes from FEMA (Federal Emergency Management Agency),î he said. ìSome insurance companies can write the policies, but they are all insured through the federal program.îThat program is the National Flood Insurance Program, created in 1968. According to its website, ìThe NFIP is self-supporting for the average historical loss year. This means that unless there is a widespread disaster, operating expenses and flood insurance claims are financed through premiums collected.îThe premiums can be costly; and, if a personís home is not required to have flood insurance (determined by the flood risk zone where it is located), most people opt out of the coverage, Inama said.Problems arise when homeowners do not understand what their regular homeownerís insurance covers, he said. ìWhen people do not take a little bit of time to understand what they have, it can be really bad,î Inama said. ìFor example, if your water heater is old and starts leaking, there is no coverage in your homeownerís policy for an old appliance, or due to mechanical failure. For the most part, appliances are not covered under homeownerís insurance.î Homeownerís insurance will likely not cover the cost to replace items damaged by the water from an appliance like a water heater, dishwasher or washing machine, he said.Some companies, like American Home Shield, provide insurance for appliances through home warranties. According to the AHS website, ìA home warranty is a service contract that covers the repair or replacement of important home system components and appliances that break down over time.îInama said he recommends getting insurance through a company that uses local agents because they can guide people through the process of deciding whether to file a claim. Without a personal agent, homeowners can call their insurance company with a question about filing a claim, but the company will often automatically open up a claim, regardless of whether the homeowner actually wants to file a claim.ìYou might end up calling a 1-800 number to ask questions; and, a lot of the time, if you make that call, you could end up having a claim opened up against you, even if it is not a claim-worthy situation,î Inama said. ìThat can be bad for them (homeowners) and even make them uninsurable down the road.îPeople get insurance for a reason, which is to cover them in the event of a costly home repair situation, like the hail storm that hit the Colorado Springs area in July 2016, he said. But if the repair is not claim-worthy or will cost less to repair than the price of the policyís deductible, Inama said it might be better not to make the claim and just pay for the repairs.Every homeownerís policy includes a declaration page that indicates what is covered and the rules related to the coverage, he said. ìSometimes, it just takes time to sit down and read through the policy correctly to understand the type of coverage you have and need,î Inama said.

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