Flood Insurance Q & A

Did you know that just one inch of water within a 2.000 sq ft home can cause almost $21,000 in damages? Floodwater can make its way into furniture, lighting, electronics, flooring, and even your irreplaceable family valuables.
If you multiply one home’s damage by the whole communities, it’s easy to understand why floods are so devastating, and why flood insurance for your home is so important. The NFIP (National Flood Insurance Program) is the primary source of flood insurance for home owners and home renters. Recently, the congress agreed to extend the program for five more years, which is kept up by FEMA (Federal Emergency Management Agency). Flood insurance is so important because flooding is the most common, and costly, disaster in the U.S

The first way to protect yourself from a flooded home is to buy flood insurance. It’s affordable compared to the cost of the repairs after a flood has taken place on your property. Here are some common questions pertaining to flood insurance:

First, is flood insurance required?

Unless you don’t have any loans or live in a apartment or condo on an upstairs floor, you should expect that you should have to buy flood coverage. Many lenders will actually require it if you live in an area that is considered high risk for flooding, and if your mortgage is federally backed. FEMA stated that flooding disasters affects all states, and actually everyone is at risk because even very small streams and creeks have the potential to flood. Your insurance agent or lender will know whether or not your home is located in a high risk zone.

Where do you get flood insurance?

Private insurers are allowed to write, and administer, policies for the NFIP due to FEMA. Also, your homeowners or renters insurance agent should also be able to write flood coverage for you as well. Coverage is available in about 20,000 participating communities, and discounts of up to 45 percent are available in communities where the local officials enforce certain requirements that can reduce flood damage altogether. Now, if your community isn’t a part of the national program, you will be able to get flood insurance through a private carrier.

How much will this cost me?

Every home is different, and your policy premium is determined by the design of your home, the age, the location, the contents, and the amount of coverage you decide to buy. In most cases, a homeowner will pay an average of $400 a year for $100,000 worth of flood insurance which is very reasonable.

But the programs recent reauthorization by Congress allows for stiffer price increases of up to 20 percent per year from the previous of 10 percent. Fortunately, your agent will be able to give you an exact cost. If you want to get a general idea, you can plug in your address into the flood risk profile on the NFIP website.