Various weather conditions could lead to flooding — hurricanes, heavy rains, spring thaws, as well as rapid rain buildup following a wildfire. Although specific areas are vulnerable to flooding, it could occur at any time and any place. According to Federal Emergency Management Agency (FEMA), flooding is the most common and devastating natural disaster in the US. Just a few inches of floodwater is enough to cause significant damage to your house, not to mention your possessions. The question is: Are you prepared for a flood? Beyond flood proofing, your house and creating an emergency plan, being fully prepared for a flood also means understanding flood insurance.
Homeowners Insurance Does NOT Usually Cover Flooding
The majority of standard homeowners’ insurance plans do not offer coverage for flooding incidents. This means that in the event of flood damage to your home, you can’t use your homeowner’s insurance to pay for the damage caused by a flood.
Is Flood Insurance a Requirement?
If your location is a high-risk flood zone and your home loan is from a government-backed lender, you’re legally required to have flood insurance. In general, you won’t need flood insurance if you live in a low- to moderate-risk flood zone. However, take note that some mortgage lenders might still require you to obtain flood insurance at their discretion, says an experienced public insurance adjuster.
How Much Should You Spend on Flood Insurance?
Flood insurance premiums would differ from one insurance provider to another. It also depends on the amount of coverage you purchase, the extent of the coverage (your possessions or just your home structure), and the flood risk of your area.
Other Crucial Things to Know About Flood Insurance
One of the most common flood insurance policies is the National Flood Insurance Program (NFIP) that FEMA offers. However, your municipality must be a participant of the program for you to be eligible for the NFIP policy. Otherwise, you could purchase a flood insurance policy from private insurance providers. Just make sure to shop around to get the best possible rates. Most importantly, the majority of flood insurance policies would only take effect 30 days after you’ve signed the insurance contract. As such, it’s best that you buy coverage before heavy rains or storm season hits.