How to Choose the Right Flood Insurance Policy for Your Needs
Most homeowners, condo, and renters insurance policies do not cover flood damage. And even if you live far from water, you could be at risk from flooding caused by storms, heavy rainfall, or melting snow. Mortgage lenders may require flood coverage if you live in a high-risk area, and private insurers also offer coverage for properties located in low to moderate-risk areas.
What is Flood Insurance?
Flood damage is the most common and costly property damage in the United States. Since standard homeowners insurance does not cover flooding, a flood insurance policy in PA is the best way to protect against it. Flood policies are available from private insurers and the National Flood Insurance Program (NFIP). Many mortgage lenders require flood insurance in high-risk areas as a condition of the mortgage. Even if you don’t have a mortgage, a policy’s still worth considering because the NFIP offers reasonable rates and comprehensive coverage for buildings and contents.
A standard NFIP policy covers building and contents up to a maximum of $1,307,500. A Preferred Risk Policy (PRP) is another NFIP option that provides building and contents coverage in moderate- to low-risk areas for a lower price. Additionally, communities that have implemented flood safeguards are eligible for discounts on their NFIP insurance. It’s essential to compare quotes before purchasing flood insurance.
How Does Flood Insurance Work?
Flood damage is a costly natural disaster costing homeowners, insurance companies, and the government billions of dollars yearly. While standard homeowners insurance covers some forms of water damage, most homeowners in moderate-to-high-risk flood zones must obtain a separate flood policy to cover their homes and belongings. The National Flood Insurance Program is a partnership between more than 50 private insurers to sell flood insurance policies.
Imagine that your community is an NFIP member. If so, you can purchase a flood insurance policy from an independent agent in your area or the company that provides your homeowners or auto coverage. Flood policies will pay you cash to repair or rebuild your house and replace any belongings damaged by flooding. Your coverage will be determined by the value and type of your property and the amount you pay. You must pay a deductible, the amount you are responsible for out-of-pocket before the insurance company starts paying on a claim.
Some types of property that you can insure include the structure of your home, foundation, walls, and roof; permanent appliances like refrigerators, washing machines, and dishwashers; built-in cabinets, bookcases, and furniture; and certain personal items like artwork and valuables. A home inventory can be a helpful way to assess the value of your belongings and determine how much building or content coverage you should buy. Your agent can also let you know if you’re eligible for excess flood insurance, offered by private insurers, that provides additional coverage beyond the limits of an NFIP policy.
Do I Need Flood Insurance?
Flood damage is one of the US’s most costly and common natural disasters. Flood insurance typically covers the structure of your home and your most valuable personal possessions. Most mortgage lenders will require this insurance if you live in an area prone to flooding. Even if you’re in a low- or moderate-risk area, it is a good idea to be covered. Floods can happen anywhere. Standard homeowners, renters, or condo insurance does not cover flood damage. A separate policy covering this type of damage is a great idea.
A flood insurance policy usually has an annual premium and a deductible that you’ll pay in case of a claim. Home insurance specialists can review NFIP maps to assess your risk. You should consult an expert and understand your risk, as the maps are continually redrawn. Typically, the NFIP will offer a variety of policies. You can also choose a private insurance policy. Our independent agents can shop for the best policies and rates to suit your needs. They can assist you in deciding if additional flood insurance coverage is required to fill any gaps left by your NFIP.
How Much Will Flood Insurance Cost?
Several factors determine the cost of flood insurance. For example, the type of coverage you purchase (building or contents) affects your premium. Also, your home’s location is crucial: insurers will consider the distance from flooding sources like lakes and rivers and your neighborhood’s history of flood events. NFIP’s new Risk Rating 2.0 program considers your property’s flood risk and adjusts your premium accordingly. FEMA data shows that single-family homeowners pay an average of $888 annually for flood insurance through NFIP.
You may reduce the costs of your flood policy by elevating machinery and equipment like a water heater and central air conditioner above the first floor and installing flood openings in walls and floors. These measures could save up to 40% of your flood insurance policy premium. You can learn more about your property’s potential flood risks by checking a local flood map and contacting your city’s planning department.
Remember that your homeowners or renters insurance doesn’t cover flood damage, so a separate flood policy is essential to protect yourself. Even an inch of water can cause thousands of dollars of damage, so get flood insurance quickly. You can find a local flood map at the National Flood Insurance Program’s Flood Map Service Center.
