Protect yourself and your home with flood insurance

If you live in a flood prone area, having flood insurance helps a great deal in preventing financial loss due to flooding. Even a few inches of floodwater can lead to enormous damage. In the US, between 2010 and 2014, the damage claim involved due to flood alone was over $39,000 in an average residential flood situation. And the premium paid annually for flood insurance was around $700 in a year.

Flood insurance is provided for renters, homeowners, and commercial and condominium owners. The cost varies based on the insurance amount purchased, the area covered, and the flood risk of the concerned property.

While considering flood insurance policy, you should discuss about insuring personal property as contents are mostly given optional coverage only. Since it is vital to protect your home along with its contents from floods, you need to consider the right coverage. Depending on the level of flood risk your home is subject to, the insurance premium would vary.

Low risk

If you live in a moderate or low risk locality, you can avail low premium insurance. Low risk areas are automatically eligible for preferred risk coverage, but if your home doesn’t qualify, you need to opt for the standard rates.

While flood insurance is not mandatory, any home can be vulnerable to a flood situation. Even those who do not come under the high-risk areas have claimed flood insurance and received assistance for damage from flooding.

Basement cover

The flood insurance policies generally cover the foundation elements of the house and the equipment needed to provide support to the building such as circuit breakers, water heaters, furnace etc. While the circuit breakers, water heaters, and furnace come under building cover, the freezer, dryer, and washers come under contents cover. To protect the basement from major damage due to floods having a proper SUMPPUMP is must.

Flood insurance does not however cover improvements done on basement such as ceilings, floors, finished walls, or other personal belongings.  To know a more detailed list, you should look into the flood insurance policy forms of your insurance policy provider, so you are not faced with any unpleasant surprises during a claim.

High risk

In case you reside in an area that has high flood risk, the only option available is the standard rate policy, which offers separate cover for contents and building.

Premiums

The flood insurance premiums are calculated based on the year of construction of the building, location of contents, number of floors, building occupancy and location of the floor present at the lowest level for newer buildings, the deductibles you opt for and the coverage value you choose for the contents and building. In case of high flood risk locations, you should have flood insurance, especially if you have a mortgage for your home through an insured lender or federally controlled lender.

Other than homeowners, renters too are eligible for flood coverage at preferred rates. This ensures a low cost premium, while providing cover for the building and contents.