Saturday, June 24, 2006

Round 2 - Getting Ready for the Season

People around the state are preparing for the next round of storms this year. Gas cans are being emptied and refreshed, generators are getting oil changes and tune-ups and people are stocking up their hurricane closet supplies. Many people that I talk to are improving on their strategies from last year. Things from hard wiring generators to having more water in storage. Still, I'm surprised by the people who do nothing. They will be the ones running around getting gas cans and batteries the day before the storm and cursing the lines.

Many people last year found out why you should review your home owners polices every few years. Floods are not covered under your existing home owners policy. Many people had the original amount when they purchased their house and had not increased the amount with their cost of rebuilding and found themselves under insured. You can go to your current agent to get your flood insurance but all of it is underwritten by FEMA and the price will be exactly the same regardless of your broker.

I spoke to an insurance agent regarding flood insurance this week and was surprised by much of the discussion. Many people who are not in flood zones have been purchasing flood insurance. We fall into this category as well. Even though the odds of a storm surge hitting Baton Rouge are slim, with all of the new sub-divisions and drainage projects, you can not be sure about flooding. Cheap peace of mind for people not in a direct flood zone.

Keep in mind the most flood insurance you can get via FEMA is $250,000. There is are some insurers who offer amounts above that similar to how umbrella policies work for liability insurance. To give you an idea, if you are in the lowest risk zone, 1 year of insurance is $296 for $200,000 worth of coverage. You have a 30-day waiting period from the day you pay your premium and they will not accept applications if there is a named storm in the Gulf. You must also pay the full year in advance.

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