What You Need to Know About Flood Insurance

This year’s natural disasters in the southern United States have highlighted the danger and loss of property that flooding can bring. Although hurricanes are commonly the force behind coastal flooding events, inland areas can also experience floods due to excessive rain or other factors. According to the Federal Emergency Management Agency (FEMA), almost 90% of all natural disasters involve some flooding.

Flood insurance, then, makes sense, even if you live in an area that may not be prone to flooding. As climate change affects ocean levels and the growth of so-called “superstorms”, flooding may happen in areas that have never seen high water. Here is some valuable information on flood insurance, designed to help you select the right flood insurance policy for your specific needs and your residential area.

Things to Know about Flood Insurance

For the most part, flood insurance is only available through FEMA, under a program called the National Flood Insurance Program (NFIP). However, there are several private insurance companies that offer insurance protection of this type, usually in excess flood insurance policies. There tend to be many misunderstandings and myths about flood insurance, such as:

My homeowner’s insurance covers flooding – this is incorrect. Most standard homeowners’ insurance policies and even renters insurance do not cover the damages that can come from flooding events. Home insurance and renters insurance is not sufficient to protect property and belongings from flood losses. Only the Federally-backed NFIP insurance covers losses due to flooding.

Flood insurance is expensive – in fact, flood insurance is very affordable. Typically, the annual premium for NFIP-backed flood insurance starts at $112. That’s just over ten dollars a month! Of course, premiums are higher for residences in flood-prone areas and for more insurance coverage. The maximum NFIP insurance will cover is $110,000 for property losses inside the home and $250,000 for the structure of the home itself.

Flood insurance is hard to get – many property owners wonder where to buy flood insurance, and believe that finding such insurance is difficult. The truth is that most insurance companies can help customers locate, select, and purchase Federal flood insurance through NFIP. Across the country, more than 100 insurance firms write flood insurance policies, and this insurance is available to any property owner or renter that lives in a community that participates in NFIP.

What about Excess Flood Insurance?

Federally-backed flood insurance policies provide coverage for losses incurred due to flood events. The maximum coverages are sufficient for many homeowners. However, other property owners may desire additional coverage, such as those with expensive homes and furnishings. Luckily, a growing number of private insurance companies are writing excess flood insurance policies. Speak to a local insurance agent today to learn more about the range of flood insurance options and policies available in your area.

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