Here are five crucial reasons why homeowners should carefully consider getting flood insurance:
1. Your standard homeowner’s insurance policy does not typically cover flood damage.
Most homes in the counties that were hardest hit by Hurricane Florence in September 2018 were underprepared for the aftermath of the storm. A Washington Post analysis revealed only one in 10 homes has flood insurance.
Since your regular home insurance doesn’t typically cover flood damage, you will need a policy offered through the government’s National Flood Insurance Program (NFIP). The average annual premium for a policy through the NFIP was $866, although it is expected to rise about 8% this year. The program’s maximum coverage is $250,000 for your home and $100,000 for its contents.
While homeowners in high-risk areas are likely required by lenders to get flood insurance, it’s also recommended that those who live in low- to medium-risk areas also consider buying a policy.
You can check the site FloodSmart.gov to learn more about the flood risks in your area. It’s also a good tool if you want to get more information about the risks, premiums, and agents near you. Your insurance agent can also be your go-to person during your research.
Likewise, flood insurance can pay whether or not there is a Presidential Disaster Declaration.
The only exception to this is when the policy you got was required upon closing on a new home purchase. When an extreme storm hits your area within the 30-day period, you’ll have peace of mind that your new home and its contents are insured.
Flood insurance premiums vary depending on the home’s elevation, the date of construction, and the relative risk of the area. And while the NFIP program has a maximum of $350,000 in coverage for your home and its contents, you may opt to buy excess flood insurance through a private carrier that would cover an amount above the national program’s limits.
It may be expensive, but don’t skimp on a flood policy and protect your largest financial investment. If you’ve been a victim of flood damage and your home is uninsured, you may get a grant from FEMA or a loan from the Small Business Administration. However, the money you’ll get may not be enough to cover the damage. According to this Realtor.com article, those federal grants are not designed to bring homeowners back to a pre-disaster condition. Insurance can help you get to where you were before the disaster occurred.
