Flooding is the most common and costly natural disaster in America. Standard homeowner’s or renter’s insurance policies do not cover flood damage, but a policy through the Flood Insurance Program can help protect your home and belongings from the unexpected.
Learn how to get a flood insurance quote and learn more about the importance of a strong emergency fund.
Protects Your Home
Flooding is the most common and costly natural disaster in the United States. Unfortunately, most standard homeowners insurance policies don’t cover flood damages. In some cases, federal disaster assistance programs are available, but these funds often need to cover the full cost of home repairs. For this reason, it’s essential to have flood insurance in addition to your regular homeowners’ or renters’ insurance.
Those living in high-risk areas, particularly those with a government-backed mortgage, must purchase flood insurance. However, it’s also a good idea to consider getting a policy even if you don’t live in an area at high risk for flooding. Heavy rains, melting snow and severe coastal weather can lead to flooding anywhere.
As homeowners assess the potential risks to their properties, understanding the financial implications becomes crucial. Moreover, flood insurance cost is a significant factor that necessitates careful consideration to ensure adequate coverage in the event of flooding.
Building coverage and content coverage are offered up to $100,000. Private companies may offer higher limits, allowing you to customize your protection better. This can be particularly helpful if you have expensive valuables like furs, jewelry and fine art.
When choosing how much coverage you need for your building and contents, it’s important to consider the size of your house, its location, and the value of your belongings. You can get advice from your agent on how much coverage to get.
Covers Your Belongings
Some people may skip flood insurance to save money on expensive items like artwork, collectibles, and jewelry. Having a policy provides peace of mind in knowing your belongings are protected. It also covers septic systems, swimming pools, fences, wells and landscaping. It covers temporary living expenses, too — such as restaurant meals if you’re forced to leave home. This information can help homeowners decide to purchase flood insurance. This infographic is an easy-to-follow visual resource that helps potential policyholders understand coverage.
Covers Damages
Flooding is one of the most common and costly natural disasters, but it’s not covered by standard homeowners’ or renters’ insurance. While those policies cover some water damage from other sources, such as burst pipes and sewage backups, they don’t pay for the widespread damage caused by rising bodies of water. That’s why flood insurance is so important.
If you live in a high-risk flood zone, you’re likely required by law to get the policy through Flood Insurance. But even those living outside the designated area may want to consider it.
Some programs offer building and content coverage, paying out on an actual cash value (ACV) basis. If your possessions are lost or destroyed, the payout will be based on their current value minus any physical depreciation. In contrast, many private insurance policies pay out on a replacement cost value (RCV) basis.
Understanding the different coverage limits available when considering flood insurance or private policy is important. It’s also a good idea to inventory your belongings so that it’s easier to file a claim should the need arise. You can use their online calculator to help estimate the cost of your belongings and compare that with the insurance coverage amounts.
Covers Additional Living Expenses
If you’re a homeowner in a high-risk flood zone, you may need more than the flood insurance standard policy to cover your losses. That’s why many mortgage lenders require borrowers in these zones to have flood insurance.
The good news is that private flood insurers can offer coverage to fill in the gaps in flood insurance policies. This includes additional living expense coverage. Experts say this can pay for everything from hotel stays to rent, car rentals, meals out, and other expenses incurred if your home were temporarily uninhabitable.
Insurance typically accounts for about 10% to 20% of the total dwelling coverage in your policy. It’s important to remember that separate from your home repair or personal contents claim expert says. The displaced costs are meant to keep you at your normal household standard while waiting for your damaged property to be repaired or replaced.
Deciding whether or not flood insurance is worth the cost depends on your specific situation, so it’s worth exploring. You don’t have to live in a high-risk area to need this type of protection; water damage is common and can be caused by any number of things, including melting snow, storms and backed-up drainage systems. To help you understand your risk, several websites can provide information on the likelihood of flooding in your area, such as this one from the flood insurance agency.
