Homeowners throughout New Orleans, LA, often ask why their homeowner’s insurance does not cover flood damage. The answer lies in the nature of flood damage and the insurance industry’s approach to it.
The Pervasive and Catastrophic Nature of Flood Damage
Contrary to other types of damage covered by homeowner’s insurance—like fire, theft, or windstorms—flood damage has a pervasive and widespread nature. A single flood event can impact a large number of homes, leading to catastrophic losses that most insurance companies simply can’t absorb.
Historical Precedent
Historically, private insurance companies found it difficult and expensive to adequately provide flood insurance due to the high cost of claims and the inability to spread risk. As a result, flood insurance became a specific and distinct type of coverage usually administered by government programs.
The National Flood Insurance Program (NFIP)
In the U.S., the main provider of flood insurance is the National Flood Insurance Program (NFIP). The NFIP was established to help homeowners protect themselves from the financial devastation caused by flooding. This program works with insurance companies like Guffey Insurance Services LLC, allowing them to sell and service flood insurance policies.
Adding Flood Insurance to Your Plan
The reality is, if you live in a flood-prone area like New Orleans, LA, you’ll need a separate flood insurance policy to be fully covered. Speak with a knowledgeable insurance agent at Guffey Insurance Services LLC to understand your options and safeguard your property from potential flood damage.
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