In This Issue

What You Should Know About Flood Insurance*

March 23, 2009

What is flood insurance?
Flood insurance is protection for your home and belongings specifically in the case of a flood. It’s provided by the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program. Erie Insurance partners with American Bankers Insurance Company, one of the top flood carriers in the country, to offer Policyholders flood coverage options through its Agents. American Banker’s product is funded by the federal government.

Why do I need flood insurance?
Your home is three times more likely to be damaged by flood than by fire. However, homeowners insurance does not cover floodwater damages. Because floods happen so often and are many times catastrophic, it’s not financially feasible for insurance companies to protect from them at a reasonable cost. Flood insurance is provided by the federal government so that some protection can still be made available, especially to those who live on or near flood plains.

What does flood insurance cover?
Most insurance is designed to replace your home and belongings back to their original state should damage occur. However, flood insurance, because of flood’s catastrophic nature, is intended to help get you back on your feet. Should a flood occur, it will replace appliances such as washers and dryers, water heaters, furnaces and freezers along with damages to the structure of your home.

What doesn’t it cover?
It does not cover basement improvements, such as finished walls, carpets and personal belongings kept in the basement. So, if you are considering turning your basement into an underground den, gym or office, you may want to evaluate your flood risk first. There might not be any protection available for these improvements.

What does it cost?
The price of flood insurance is based on flood risk in your area. Premiums can range from as low as $119 per year to more than $400, depending on where you live.

How do I purchase it?
Flood coverage is not available in all areas, however it is in most. To find out if it’s available where you live, contact your ERIE Agent.

What else do I need to know?
Purchasing flood insurance takes some time. There is a 30-day waiting period before the policy goes into effect. So, if you’re worried about spring flooding, its best to purchase the coverage as early as possible.

* The contents of Eriesense magazine and eriesense.com are provided free of charge for the education and entertainment of Policyholders of Erie Insurance (“ERIE”). Unless otherwise noted, the opinions provided by the authors and/or subjects of articles are not necessarily those of ERIE. Information provided is general and educational in nature. It is not intended to be, and should not be construed as, financial planning, investment, legal or tax advice. Consult with an attorney or tax or financial advisor regarding your specific legal, tax or financial situation, and with a licensed insurance agent or advisor about your specific insurance needs. ERIE makes no warranties with regard to the information contained in this publication or results obtained through its use. ERIE disclaims any liability arising from the use of, or reliance on, such information.