Flood Insurance Information
There's something you should know: Flood losses are not covered by your homeowners insurance policy.
Floodwaters have the power to damage not only your home and sense of security, but also your financial future. How can you protect your most important investment in case of flooding?
Option 1: Hope that you'll receive Federal disaster relief if a flood hits.
Many people wrongly believe that the U.S. government will take care of all their financial needs if they suffer damage due to flooding. The truth is that Federal disaster assistance is only available if the President formally declares a disaster. Even if you do get disaster assistance, it's often a loan you have to repay, with interest, in addition to your mortgage loan that you still owe on the damaged property.
Most importantly, you must consider the fact that if your home is flooded and disaster assistance isn't offered, you'll have to shoulder the massive damage costs alone. The bottom line is that if you're looking for secure protection from financial loss due to flood damage, Federal disaster assistance is not the answer.
Option 2: Buy flood insurance and stay protected no matter what.
When disaster strikes, flood insurance policyholder claims are paid even if a disaster is not Federally declared. Flood insurance means you'll be reimbursed for all your covered losses. And unlike Federal aid, it never has to be repaid.
In general, a policy does not take effect until 30 days after you purchase flood insurance. So, if the weather forecast announces a flood alert for your area and you go to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood.
Common Flood Insurance Questions:
All homes are at risk of floods, even those that have never flooded before. Of course, some properties face higher flood risks than others. Depending on how your home stacks up, your need for flood insurance might be significant.
Standard home insurance might cover you for household water damage that results from a burst pipe or similar incident. However, the unpredictability and astronomical costs of flooding related to river swells, storm surge, heavy rain or similar occurrences make it hard for home insurance to cover the risk. At this time, a separate flood insurance policy becomes necessary.
Even an inch of water in your home can cause thousands of dollars in damage to both your dwelling and possessions. By filing a claim on your flood insurance plan, you will be able to receive compensation for these losses, and you won’t spend precious personal money trying to fix the damage.
Most flood insurance plans are underwritten by the National Flood Insurance Program (NFIP). If you live in a community that participates in the NFIP, then you can buy an NFIP plan. You can buy NFIP plans both through major insurers and the NFIP Direct system. Non-NFIP plans are also available, though they are less common.
NFIP plans must comply with standards set by federal law. They offer two types of coverage:
NFIP plans will offer coverage up to the following limits:
One- To Four-family Residential Addresses: $250,000 Structure/$100,000 Contents
Other Residential Buildings: $500,000 Structure/$100,000 Contents
Non-Residential Businesses and Buildings: $500,000 Structure/$500,000 Contents
There is also coverage for debris removal costs, loss avoidance and cost of compliance.
Many homeowners are required to buy flood insurance:
If you live in a designated high-risk flood zone, and you have a mortgage backed by a federally-insured lender, then you will have a coverage requirement.
Some lenders require mortgage holders to buy flood insurance regardless of whether they live in a high-risk zone.
Coverage is required if you live in a high-risk flood zone and have ever received disaster assistance through FEMA or through the U.S. Small Business Administration (SBA). If you do not buy a policy, then you will not qualify for such assistance in the future.
Talk to one of our agents to determine which flood insurance options are best for you. We recommend that you have your plan in place from the moment you close on a home purchase. We’re committed to working with you to ensure you receive the right benefits at the right time.