Flood Insurance

Facts about Flood Insurance

Traditional homeowners insurance does not include flood coverage. It might cover damage from rain, but not damage from a flood. This is of particular interest to people who live near lakes, streams or rivers. People who live near coastal areas or in areas that have tropical storms should be concerned as well. All of these incidents can damage your home. And without flood insurance you have no recourse because homeowners insurance does not cover these events.

Is it Really Necessary?

If you own a home in a high-risk flood area you might be required to have this coverage. Many lenders will not issue a mortgage loan if the person refuses to get flood insurance. Plus, homes located in low- to moderate- risk zones can occasionally experience flood damage as well. So considering that, it is no surprise lenders would prefer a person have flood coverage. One flood can cause up to $30,000 worth of damages or more.

If your community participates in the National Flood Insurance Program (NFIP), which is federally funded, then there are two types of policies. One policy is for the building and the surrounding property for up to $250,000. The other policy is for personal property up to $100,000. Anything in excess of that must be covered by another provider.

The policy you purchase should cover the cost to repair your home or be the actual value of your home. Consider you might have to replace things such as furniture, appliances, and clothes. And you might need to make several expensive repairs or even rebuild certain areas. Keep all of this in mind when deciding how much coverage you need.