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An In-Depth Look at the Best Flood Insurance Options Available Today

16 April 2020 No Comment

Did you know that damages from flood losses in the United States have increased to an average of $10 billion per year? Flood insurance is essential no matter what part of the United States you live in, and you need to find the best flood insurance that will protect your home.

Between federal and private insurance companies, you have options and looking at every aspect, from what your risk level is to the possessions in your home. Keep reading to learn more about your flood insurance options and which will protect you and your home.

Are You in a High-Risk Zone?

Floods can come from hurricanes, storms, overflowing rivers and more. According to the Federal Emergency Management Agency, flooding has happened in every state at least once in the past five years.

No matter what level of risk your home area is at, flood insurance is important to consider because it happens everywhere.

If you aren’t sure what hazard zone your home is in, you can use FEMA’s flood map service center to find a map of your area. All you need to do is type in your address, city or latitude and longitude coordinates and you will be able to see if you are in a hazard zone.

Questions to Consider Before Looking into Flood Insurance Rates

There are a few questions you can ask yourself before you decide what type of flood insurance you should buy:

  1. Has your home ever flooded before?
  2. Do you have a basement?
  3. Are you in a hazard zone?
  4. Can you afford flood insurance?

Whether you feel that it’s worth investing in flood insurance or not, if you don’t have it the unexpected cost of damage a flood will be more expensive than your investment.

Federal Flood Insurance

When it comes to government flood insurance, you can buy it through an agent or an insurer, there is no option to get it directly from the government.

The National Flood Insurance Program (NFIP) has rates that are predetermined by factors such as the value of your property, the year it was built and the flood risk in your area.

The NFIP rates are more affordable flood insurance in some cases compared to private flood insurance rates.

The NFIP covers:

  • Damage to your home’s structure: This includes the foundation, electrical and plumbing systems
  • Damaged possessions: Clothing, electronics, appliances, and furniture
  • Ruined refrigerator food
  • Debris removal

The NFIP doesn’t cover:

  • Injuries caused by flooding
  • Damage to outdoor property: Fences, patios, and pools
  • Additional living expenses if you must leave home: Meals, gas, hotels
  • Damage to your cars
  • Home improvements: If you’ve recently carpeted your basement or finished the walls
  • Damaged possessions: They will not cover belongings in your basement

Federal insurance is available to everyone and reliable. However, it doesn’t cover everything and claim limits are usually under $250,000 and it takes 30 days to start.

It’s important to consider if what the federal insurance covers is enough, depending on your risk area, home, and possessions.

Private Flood Insurance Companies

Buying private flood insurance isn’t available in all states and these companies may be more expensive than the NFIP.

Claim limits can be higher with a private insurer and you should consider this if your belongings are above $100,000 and the value of your home is more than $250,000.

There is a shorter waiting period for private flood insurance to kick in, only 14 days versus 30 days federal insurance.

However, private insurance can drop you or not renew your policy at any time. This poses a risk because it may leave you looking for a flood insurer last minute.

You will need to shop around to find the best flood insurance companies and get multiple quotes, list out what’s covered and see what would the best fit for you.

Do your research and price everything out to find better flood insurance.

Understand Affordable Flood Insurance

Depending on what area you live in, flood insurance rates will be different in terms of the NFIP vs. private insurance companies.

For example, in high-risk flood zones, the NFIP will likely have cheaper rates. In low-risk flood zones, you may be able to find private insurance companies that have cheaper rates.

You are eligible for a discount on federal flood insurance if your community meets the qualifications of the Community Rating organized by the NFIP. Your area is rated on a scale of 1-10, with a lower rank you receive a higher discount. The discounts from 5%-45%.

You can also get a discount if you follow the floodproofing techniques established by the Federal Emergency Management Agency (FEMA). You may also want to consider elevating your house and receive an elevation certificate.

The NFIP explains that flood insurance rates can range from as low as $119 per year to $1,027, all depending on if you are in a low or high-risk area.

Though whether you are in a low or high-risk area, it is important to note that 1 inch of water can cause $25,000 worth of damage to your home.

You want to make sure to protect your home and yourself because as floods are becoming more common, the lines between high and low-risk areas may be blurred. Be prepared and protect yourself from the beginning, when you first buy a home.

Let’s Get Insured

After learning about the best flood insurance, you can select which one is best for you and your home. Whether it’s federal insurance through the NFIP or going through a private company, your home will be protected.

Give it a go and call multiple private insurers and compare against government pricing. Doing your research will only help you in the end, and will help you find the best fit for you and your home.

When you do research, make sure to consider the questions we listed and to think about the cost for a year of flood insurance vs. the cost of damage if a single flood were to happen in your area.

Get started in finding the right flood insurance today or read more articles about being cost-effective here!

 

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