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The Hidden Dangers of Floods: Why Tennessee Residents Need Insurance

Floods are one of Tennessee’s most dangerous and costly natural disasters. Because standard homeowners’ and business owners policies exclude flood damage, it is vital to have a policy that fills the gap. A local independent insurance agent can help you explore your options for flood insurance in Tennessee. The main options include the government option known as NFIP and private insurance companies that resell NFIP policies.

Financial Loss

Besides structural damage, flooding can cause substantial financial losses. If you don’t have a dedicated Tennessee flood insurance policy, you will be responsible for paying out of pocket for cleaning up and replacing damaged items. This can add up quickly. With comprehensive coverage, however, you can focus on rebuilding your home and life.

In Tennessee, flood insurance is available for homes, condos, mobile homes, and businesses in designated flood zones. The cost of your policy will vary based on the area you live in, its history with flooding and your structure’s elevation. You can also purchase contents coverage, which covers personal belongings and inventory.

Depending on your policy, this coverage typically reimburses you for actual cash value or the original replacement cost. While many believe they don’t need Tennessee flood insurance because they don’t live in a high-risk flood zone, it is important to remember that even the lowest-risk areas can experience flooding.

As little as one inch of water can lead to more than $25,000 in damages in a single home. The good news is that it’s easy to find affordable Tennessee flood insurance policies. The right insurance company can help you get the best rate on your policy by using LiDAR technology (similar to that used by the military and NASA) to accurately pinpoint elevation measurements for your home or business.

Property Damage

Flooding damages property and can lead to financial disaster, especially for homeowners or business owners with no resources to cover repairs, rebuilds or inventory loss. Standard homeowners or business insurance policies do not cover the damage caused by floods, so a Tennessee flood insurance policy is necessary for those who own and operate residential homes, condos, mobile homes, commercial buildings or rental properties in high-risk areas.

The good news is that flood insurance can protect the building structure (known as “building coverage”) and personal possessions or contents, such as furniture and appliances. This coverage type is unavailable through a standard home or business owner’s policy. Still, the National Flood Insurance Program (NFIP) and private insurance companies that sell NFIP policies offer it.

Your independent agent is the best resource to explore your options for flood insurance in Tennessee. They know what kind of coverage is required in your area and how much you need and can gather quotes to help you compare pricing. They’ll also be there when you need to file a claim and walk you through the process. Many Tennesseans mistakenly believe they don’t need flood insurance because they don’t live in a high-risk flood zone. However, the truth is that everyone needs this essential protection.

Personal Possessions

The federally managed National Flood Insurance Program (NFIP) covers buildings and contents. The former covers the structure of a building, including walls, floors and ceilings. The latter covers the belongings inside a home or business, such as furniture, clothing and appliances.

The NFIP reimburses owners of single-family primary residences up to 80% of the value of their property at the time of loss, with possessions being valued at actual cash value (ACV). Businesses and rental properties are compensated on an ACV basis as well.

Most homeowners’ or renters’ insurance policies in Tennessee do not cover flood damage, so those who live or own a property in a high-risk flood zone are often required to purchase a separate flood policy. A knowledgeable independent agent can help you determine whether your current policy will protect you from the threat of flooding and point you toward an NFIP-backed flood insurance option.

Having the right protection could mean the difference between financial recovery after flood damages or bankruptcy for many homeowners and business owners. Even if your community has never experienced floods, the river levels can rise suddenly due to heavy rainfall. Flooding is the leading cause of severe weather-related death in the U.S., and one inch of water in a home can cause $25,000 in damage.

Coverage Options

Since flood damage is excluded from standard homeowners and business insurance policies, Tennessee residents must look into the options available under a dedicated flood policy. The most common types of coverage available under a Tennessee flood insurance policy include building and contents coverage. Building coverage protects structures like homes, apartments, commercial buildings and mobile home parks. This type of coverage often protects the structure’s foundation, electrical systems, indoor plumbing and built-in appliances. It may also cover additions to the building, like new flooring or carpeting. It may also protect the structure from sewer backups caused by flooding. In terms of contents coverage, it typically covers personal belongings like furniture (built-in and free-standing), smaller appliances, clothing, valuables and food. This type of coverage is usually reimbursable at the original replacement cost minus any physical depreciation. This reimbursement method can help residents recover more quickly and completely from a disaster. The cost of a Tennessee flood insurance policy depends on various factors, including location, area flooding history and the property’s elevation—some counties with a higher risk of flooding experience more expensive rates than others. 


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