In many parts of the world where floods are experienced on a regular basis, commercial flood insurance is a necessity. It is very risky for business owners in the State of Florida to operate without this type of cover. This is because floods can cause extensive damage to buildings and their contents. According to official figures, nearly 40 percent of small firms never reopen after business premises get flooded. This is because even a few inches of flood water can cause extensive damage amounting to tens of thousands of dollars. Flood insurance is normally purchased separately from commercial property insurance. This is largely due to the fact that most property insurance policies do not offer flood coverage. It is therefore important for business owners to check their policies to make sure that they have sufficient flood cover.
Causes of Flooding
Flooding normally occur when there is heavy rainfall. Blocked storm sewers can also cause flooding in certain areas. A modification of the drainage pattern of a region can also lead to flooding. Whatever the cause, commercial property owners and business owners should find a commercial insurance agency to help them procure the right policy.
Calculation of Flood Insurance Premiums
There are many factors that come into play when calculating premiums for flood insurance. For instance, the flood zone where the property is located has a very big impact on premiums. Generally, flood zones are divided into high-risk, low-risk and medium risk zones. Properties located in high-risk areas attract higher premiums and vice versa. The year of construction of the building, its occupancy and number of floors are also considered when calculating premiums. The value and location of items in a building also affects premiums.
When to Buy Flood Insurance
Commercial flood insurance policies normally have a 30 day wait period. This means that purchasing a policy in Florida when heavy rains start falling in the area will not be of any help. The best time to procure flood insurance is immediately after a business goes into operation. A standard policy will cover damage on the structure of the building as well its contents. Commercial flood insurance claims vary depending on the amount of cover purchased. However, the average flood insurance claim over the last few years has been around $85,000.
What to Consider When Looking For Flood Insurance
The coverage limits for a building and its contents must be considered when looking for coverage. This is simply the amount of money that the business owner will receive as compensation when flooding occurs. The amount of premiums paid for a certain amount of cover can be reduced when deductibles are factored in. For instance, commercial property with items kept on the first or second floor can get huge discounts because of the low risk flooding poses to the contents of the building.
According to the National Flood Insurance (NFIP) Program, owners of commercial property can get up to $250,000 in building coverage and up to $100,000 in contents coverage. Commercial properties that qualify for NFIP include real estate owned property, farms, apartment buildings, residential buildings for more than 4 families, and office buildings among other commercial properties.
Want to know more about commercial flood insurance and find a reliable Tampa Bay commercial insurance agency, call Mid Florida Insurance Professionals at (813) 962-3082.