Flood Insurance

Why Purchase Flood Insurance?

Homeowners can often be under the mistaken impression that a typical home insurance policy will cover every kind of potential damage to their home. However, coverage for flood damage is really never a part of these policies. It is therefore necessary to obtain a separate flood insurance policy for the financial protection of one’s home from flood events arising from hurricanes, storms, or overflowing bodies of water.

Essentially, when one purchases a good flood insurance policy, he or she is obtaining coverage that is engineered to financially safeguard their property from damages to both covered structures and/or their personal belongings within. These policies can be bought from the insurance agencies that have agreed to a level of government regulation. Typically, this means that consumers will see costs that are mostly uniform for policies, no matter where they are purchased.

Those who buy homes located in certain government-indicated high-risk zones must also buy a flood policy in order to obtain a mortgage. Those living in low or mid risk zones aren’t mandated to get this coverage, but keep in mind that having it could be a financial life-saver because we can never predict when nature will strike. According to the Federal Emergency Management Agency (FEMA), there is not one state in the union that has not experienced a flood over the last five years.

Obtaining a supplemental flood insurance policy safeguards your home from flood-caused damage and compensates the policyholder for belongings and/or personal property that are damaged or destroyed. Coverage extends protection to a home’s foundation and structure and, if included in the particular policy, personal items, like fixtures and appliances, furniture and electronic devices. It can also reimburse policyholders for the removal of debris resulting from flood damage.

The most common way to acquire this coverage is in buying a policy through the National Flood Insurance Program (NFIP), which is a part of the U.S. federal government. The most coverage that one can acquire for a home is $250,000, while personal belongings coverage is topped at $100,000. The feds require a 30-day waiting period prior to coverage becoming active. One also has the option to buy a private policy to obtain more coverage than what the government regulates. FEMA indicates that the average policy will set one back by $700 annually. Rates tend to be lower for those living in low or mid-risk zones. Other things that affect the policy cost will include the following:

• Home Design
• Where Personal Items are Stored
• Number of floors in Covered Structure
• The Home’s Age & Type of Building Materials Used
• The Deductible Amount & Coverage Level Chosen