Flood Insurance – A Guide to the Facts

Flood insurance is often disregarded as a viable option for coverage. If you live in a high-risk flood area, though, it is a mandatory purchase. High-risk flood areas are designated as Special Flood Hazard Areas (SFHAs). These areas are defined as an area of land that has a 1% chance of being inundated by a flood in a year.

Even if you live in a high-risk area, your homeowner’s insurance policy may not cover flood damage. Check your policy for specifics. It’s important to note that floods can arise from not only natural disasters, but also from clogged drainage systems, leaks from your water pipes or a busted water hose. When inquiring about flood insurance, ask your insurance company whether your policy covers these types of claims.

Are you required to purchase flood insurance if you do not live in a special flood hazard area?

If you live in a low to moderate risk area, you are not required to purchase flood insurance. A lender, however, can mandate that you purchase a policy before they approve you for a mortgage. Even if your lender does not require a flood insurance policy, it may be a good idea to ensure your home is protected in case of a natural disaster. Approximately 25% of all claims culminate from these low to moderate flood risk areas. Additionally, if your location is added to a high-risk map due to a revision, you will be required to purchase flood insurance at that time.

Note: If you live in a low to moderate risk zone you may be eligible for a Preferred Risk Policy, which costs less than a policy for a person who lives in a high-risk flood location.

Inquire about Coverage for your Personal Belongings

The contents of your house are not included in most policies unless you add the coverage. Under a basic flood insurance policy, if your belongings are damaged, most likely you will not receive money for your loss. For residential policies, the contents coverage limit is $100,000.

When you receive a quote, talk to the insurance company in detail about your coverage. You may need to add personal belongings and natural disaster coverage as well.

Getting a personalized flood insurance quote is fast and easy. Let us help make this process as easy as possible for you. Visit our insurance help center and receive a free personalized flood insurance quote today!

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