As of April 1, 2015, new rates went into effect under the National Flood Insurance Program. This increase mainly impacts those in high-risk areas with rates up as much as 25%. All insured will see new surcharges of $25 for primary homes and $250 for second homes.
“It’s important to note that your standard homeowners policy does not cover flood damage,” said Bill Arowood, president of Oak Ridge-based Appalachian Underwrtiers Inc. “You must obtain additional coverage for these types of losses.”
According to the federal flood insurance program, the average premium is $650 a year. For most of the low-risk areas of East Tennessee, this premium is significantly lower.
This increase in rates to the federal program is in response to several major disasters in the past decade. Congress passed two acts in the past couple of years to make adjustments to this program. The first initiated the rate increases. The second eased the burden of the increase on low- to middle-income families.
If you are unsure of your flood insurance coverage, it is always a good idea to review your homeowners policy each year at renewal to make necessary adjustments.
To learn more about Appalachian Underwriters Inc., visit www.appund.com.