Wednesday, March 16, 2011

How do you get tsunami insurance?

How do you get tsunami insurance?

Buy a flood policy.

Earthquake coverage generally doesn't include damage and flooding from a tsunami. But flood policies under the National Flood Insurance Program, a federally run program that insures millions of homes and businesses, do cover tsunami damage. The surge of water is treated the same way as a storm surge from a hurricane would be.

We double-checked this with the NFIP, which steered us to the following definition of flood in the National Flood Insurance section of federal law:

Sec. 1370 (42 USC 4121)

(1) The term “flood” shall have such meaning as may be prescribed in regulations of the Director and may include inundation from rising waters or from the overflow of streams, river, or other bodies of water, or from tidal surges, abnormally high tidal water, tidal waves, tsunamis, hurricanes, or other severe storms or deluge.
The federal flood program has issued more than 5 million policies across the country, insuring more than $1.2 trillion in property. Here in Washington state -- a quake-prone region with hundreds of miles of coastline -- some 51,000 policies are in force. Coverage is particularly heavy in places like Centralia, Aberdeen, King County and Snohomish County.

Here's a plain-language summary of federal flood coverage.

And we should also point out that the federal program does not cover things like business-interruption coverage, which can be crucial for businesses. Also, NFIP commercial coverage maxes out at $500,000 for a building and $500,000 for contents. The good news: insurance brokers can find additional flood coverage for you, often through what are called surplus line insurers.