Do you have homeowners flood insurance? Do you need flood insurance? Do you know exactly what your policy covers and if it provides all the coverage you need? We’ll tell you who is most likely to benefit from flood insurance and how to choose among the available flood insurance companies.
This article is for homeowners. If you are a renter, here is more information on renters flood insurance.
The first thing you need to know is that standard homeowners insurance policies usually do not cover flood-related damage. Many homeowners assume their insurance policy will cover any kind of damage to their home, but that’s usually not the case. In addition to flooding, homeowners insurance policies usually don’t cover earthquake damage, damage caused by a nuclear accident, or damage caused by acts of war. There may be other exclusions. You need to read your policy carefully to see what is and is not covered. If you want additional coverage, you can probably purchase it.
If you live in a high-risk area, meaning there is at least a 25 percent chance that you’ll experience a flood during the 30-year period of a typical mortgage, and if you have a mortgage from a federally regulated or insured lender, you are legally required to have flood insurance. If you live in an area that is considered low or moderate-risk, you aren’t legally required to have flood insurance, but some lenders may still require it if you with to mortgage your home through them.
Even if you aren’t legally required to have it, though, flood insurance may be worth purchasing. According to the National Flood Insurance Program (NFIP), more than 20 percent of NFIP insurance claims come from areas considered to be at moderate or low risk for flooding. Those claimants probably feel their flood insurance was well worth the premiums they paid!
The National Flood Insurance Program website reports that the average insurance claim for flood-related damage is more than $38,000. Just one foot of water in a 1,000-square-foot house can do more than $27,000 worth of damage. Unless you’ve got that kind of cash available in case disaster strikes, you can probably benefit from flood insurance.
The cost will depend on a number of factors, including where you live, the size and value of your home, and whether your property is in an area that is considered to be at high, moderate or low risk for flooding. According to the NFIP, the average annual premium is $650, though flood insurance may cost you more or less than that amount. Premiums may vary from one insurer to another, so it’s worth it to check with a few and compare costs and coverage options.
There are many flood insurance companies out there. How do you know which to choose?
Many homeowners simply purchase flood insurance from the company that insures their home against other types of damage. Hopefully you have homeowners insurance (if not, we encourage you to look into it right away) and we suggest checking with your insurance agent to find out how much it would cost to add flood insurance to your policy. If you have other insurance policies through the same company, such as auto or life insurance, you may even qualify for a multiple policy discount.
Of course, you can look into other insurance companies to see if they offer better rates than the company you’ve been using for homeowners insurance.
Depending on where you live, you may also qualify for flood insurance through the National Flood Insurance Program.
If you’ve already suffered flood damage, we recommend contacting a professional water damage contractor. A professional will visit your home, inspect the damage, advise you about the work that needs to be done, and provide a written estimate for the cost of the job. If you’ve got homeowners flood insurance, water damage contractors will help you figure out what your policy covers and assist you in filing a claim. It’s important to deal with the damage as quickly as possible, before mold can take hold. To find qualified water damage contractors in your area, just follow the link.
And if you don’t have flood insurance, the fact that you’ve suffered flood damage won’t prevent you from getting flood insurance in the future. After you sort out how to pay for the repairs you need, follow the suggestions above to get yourself insured in case it ever happens again.
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