Not long ago the city of Houston and many of its craft breweries and beer distributors were devastated by some of the most prolific flooding ever seen.  Because of this, I thought it would be appropriate to discuss one of the most misunderstood insurance coverage’s; Flood Insurance. Do you need it and why?

Flooding is the most common of all natural disasters.  They are not just caused by storms but can easily be brought on by the failure to maintain drainage systems, excessive development and sudden changes to run-off patterns.  They can happen anywhere and at any time.  Over 20% of flood events come from properties not located in the flood plain. The results from these events are devastating! It has been estimated that one inch of water in a business or home will produce in excess of $20,000 in damage.  While many traditional property policies cover water damage caused by freezing pipes, burst appliances and malfunctioning plumbing systems, virtually none protect against excessive rain, burst dams, or the malfunction of storm sewers.

The majority of flood insurance policies are provided by the National Flood Insurance Program or (NFIP).  The NFIP has contracted with a number of well-known insurance companies to administer these policies.  Because of this, the premium and coverage are the same regardless of which company provides the policy.  Everybody is eligible to buy flood insurance regardless of where their property is located.  You do not have to be in a flood plain to purchase flood insurance.  Rates are developed with the use flood maps and elevation certificates.  These maps are broken down into areas referred to as zones, with some zones being much higher risk than others.

It is important to know what your exposure is.   You may want to contact FEMA and review the flood map and determine what your flood risk might be. In addition to your Primary location, particular attention needs to be paid to storage facilities that many time house brewing supplies and even finished product.   The purchase of flood insurance in many cases is the difference in being able to recover and not.

Charles Brown is the owner of International Insurance Brokerage in Franklin, Tennessee