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Flood Insurance

Things to know about Flood Insurance

The National Flood Insurance Program (or NFIP) categorizes a flood as “”a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.”” This is a big gap that is in practically all homeowners’ insurance coverage.

What is flood insurance?
Flood coverage is a specific kind of insurance designed to cover a home and the contents within from flooding. A lack of flood insurance coverage means that the homeowner who sustains flood damage is financially vulnerable to the potentially disastrous effects of these events.

Who benefits?
Keep in mind that approximately 25 percent of all flood claims are for those who live in an area that isn’t considered to be in a high risk zone. In other words, one doesn’t have to reside on a flood plain to obtain insurance for flooding. A homeowner who lives in a region that participates in the NFIP can obtain flood insurance help. Even renters can have it to cover their personal effects. Anyone who lives in an eligible region who also has a mortgage is mandated by their lender to purchase this coverage. However, keep in mind that this protection will not go into effect until a month after you’ve purchased the coverage. NFIP policy coverage limits are set at $250,000. So, if your home is valued at $350,000 and is destroyed by a flood event, the remaining $100,000 is your personal financial responsibility.

If your home was not considered to be in a flood plain however many years ago when you purchased it, that doesn’t mean you are not now in such a zone now. With the effects due to climatic changes becoming more evident, investigating whether you fall into the flood plain category is smart move. The governmental website will help inform you of this by simply typing in your address.

Private flood insurance
For those who do not fall into the category of NFIP coverage, there a few private insurance companies who provide flood coverage protection. Inquire of your broker or agent to see about setting up a policy with these particular providers.

With the exception of living on the top of a hill somewhere, you may indeed be wise to speak with your agent about good flood insurance coverage.