The Pros and Cons of Flood Insurance
For many companies, the decision on whether or not to buy flood insurance is a difficult one. After all, most companies have a strong commercial insurance policy that covers many perils. In most cases, though, damage from a flood will not be covered by the regular policy. For insurance purposes, a flood is described by FEMA as a "temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties..." In some situations, the decision of buying flood insurance is made for business owners. If the owner has a federally insured mortgage and the property is situated in a flood plain, a flood policy is mandatory.
The Pros of Flood Insurance
Most business owners purchase insurance for floods from the National Flood Insurance Program. This federal program provides payments for floods in South Garland, TX, and elsewhere in the U.S. It provides the following benefits to policyholders:
- Peace of mind
- Payments of up to $500,000 for structures
- Payments of up to $500,000 for belongings
- Prospects of faster recoveries for businesses
- Transfer of some of the risks to the government
Even in years without a damaging flood, the NFIP allows business owners to better plan expenses. By reducing uncertainty, a company might not need to set aside large amounts of discretionary funds.
The Cons of Flood Insurance
Some business owners might feel that paying for commercial insurance and flood insurance is too expensive. They might also feel that the payment limits on federal flood insurance are too low. In any event, floods across the U.S. can often be devastating. They also often require the services of a professional storm mitigation company. A fast response by experienced professionals can limit damage to a building and its belongings. Vigorous action by trained technicians is another way a company can quickly rebound from the expenses associated with storms.