If you’re trying to protect your home from flooding, you might wonder how to go about doing that. You might be considering flood insurance, but you want to find out what the big deal is. What does flood insurance do? What do you need to know about it as you get a flood insurance policy? We’ve got a list of 10 helpful things you should know about the coverage.
10 things you should know about flood insurance.
1. Flooding is not covered by home insurance.
Many homeowners operate under the assumption that their home insurance covers flooding. But that’s not the case – home insurance generally excludes flooding. (When we say flooding, we mean that a lot of water has accumulated on the ground where there usually isn’t a lot of water – like when there’s a lot of rain or when a river overflows.) For a flood loss to be covered, you would need to have flood insurance, which is a separate type of policy.
2. Homes that aren’t in “high-risk” flood areas can still get flood insurance.
Your home might not be in a “high-risk” flood zone, but you can still get flood insurance as long as your community participates in the NFIP (National Flood Insurance Program.) Even if you’re home isn’t technically “high-risk” for flooding, you never know when you could get a surprise swimming pool in your house.
3. You can go through the NFIP to get flood insurance.
To get flood insurance, you can go through an agent and get a policy from the NFIP. The NFIP is kind of the place to go for flood insurance.
4. You’ll only get one price.
So, you’re a thrifty person, and you know that shopping around can help you save money. But when it comes to flood insurance, keep in mind that you’ll probably only get one price, no matter how many insurance agents or agencies you go to. (That’s because you’re most likely getting your policy from the NFIP.)
5. Don’t forget about the waiting period.
Yes – flood insurance policies take 30 days to become effective (basically meaning that it takes a month for the coverage to kick in.) That’s why it’s important to be prepared and get your flood insurance policy well in advance of the rainy season. There are a few exceptions to this waiting period, but it’s truly only a few. (For example, if you need the flood insurance to get, extend, or increase your mortgage loan.)
Bottom line is don’t wait until you hear news coverage of an impending whopper storm before you seek flood insurance.
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6. You have to pay all in one go.
You have to pay for the entire policy up-front. You can’t pay your premium in installments, so be prepared for a little bit of sticker shock.
7. Don’t forget about preferred risk policies.
Preferred risk policies are for homes that are in low or medium-risk flood areas. Basically, this is a policy intended for low or medium-risk homes that may cost less than a “normal” flood insurance policy. If you think your home could qualify, ask your agent. They can help.
8. The price of flood insurance depends on different things.
There’s no one-size-fits-all price for flood insurance. Your premium is going to depend on a few factors. For example…
- The age of your home
- The material your home is made of
- The flood risk of your area
- The deductible
- The amount of coverage you purchase
It all boils down to how much of a risk your home is to insure. The insurance company is so concerned with all of these details because they want to determine how likely you are to file a claim.
9. It’s important to insure your dwelling and your belongings.
It’s also important to make sure you have enough coverage for both your house and your personal belongings. You can purchase up to $250,000 of dwelling coverage and $100,000 of coverage for your belongings. Make sure you’re getting coverage for both the house and your stuff.
10. Flood insurance isn’t just for homeowners.
Let’s say that you’re renting your house. You can still get flood insurance to protect your belongings. Your landlord will have to decide how they want to insure the structure itself, but you can get coverage for your things to protect your possessions.
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