Minnesota Gov. Tim Pawlenty signed a bill on May 14th that requires insurance companies and agents to notify homeowners annually if their insurance policies do not include flood coverage. The required notice will say the homeowners have the right to buy flood insurance if they choose.
Pawlenty had proposed the legislation in August 2007, after floods hit southeastern Minnesota; many living there were unaware that flood insurance was not included in their home insurance policy or believed flood insurance was unavailable to them.
“During my visits to southeastern Minnesota last year, many homeowners were unclear about their flood insurance eligibility,” Pawlenty said. “This new law will help consumers by giving them more information about their insurance coverage options. We are hopeful this will increase the number of homeowners purchasing flood insurance so that more Minnesotans will be covered the next time flooding hits our state.”
Standard homeowners policies don’t include flood insurance. This new law requires written notice to homeowners stating their policy does not include flood insurance and they have the right to purchase flood insurance, provided their community participates in the National Flood Insurance Program. Homeowners who live in a flood zone must purchase flood insurance from NFIP.
The average flood insurance premium is $400 per year depending on where you live and the coverage you choose. In low to moderate risk areas, coverage can be purchased for just over $100.
Additional information on flood insurance facts include that:
Homeowners can buy up to $250,000 worth of structural coverage. Businesses can buy up to $500,000 of coverage. There is separate coverage for contents: up to $100,000 for residential and $500,000 for non-residential, so renters can purchase flood insurance too;
Standard flood insurance does NOT typically cover basement improvements or personal contents in basements. It does, however, cover the structural elements and essential equipment normally located in basements, such as a furnace, water heater, washer and dryer; and,
Flood insurance becomes effective 30 days after it is purchased, and the state says 20-25 percent of all flood claims filed in Minnesota come from areas that are not designated high risk for flooding.
Source: Minnesota Department of Commerce
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