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What You Need to Know about Flood Insurance – A Guide

12 May by 5280 Insurance

As climate change causes more catastrophic weather events, such as storms of epic proportions that cause heavy rains and flash flooding, the need to get flood insurance has never been more essential.

According to the Federal Emergency Management Agency (FEMA), floods may happen anywhere, and even one inch of water can inflict up to $25,000 in damage.

If you’re not sure whether flood insurance is a good idea for your living circumstances, here are some crucial questions and factors to consider.

How Do You Know Whether You Need Flood Insurance?

If you live in an area that FEMA identifies as having a high risk of flooding, you’re at high risk of damage in the event of flooding and should absolutely talk to an insurance agent about whether flood insurance coverage makes sense for you.

Whether you’ll qualify for flood insurance and the amount of coverage you’ll be able to purchase will depend on how high a risk the flood insurance company views your living situation.

The higher risk you pose, the higher the premium you’ll have to pay. You should also ask your insurance agent whether a federally subsidized program is available to help you pay for the premium cost.

What Does Flood Insurance Cover?

In addition to covering the cost of repairing or rebuilding your home, other flood insurance policies can also cover your belongings.

Building coverage protects the foundation of your house and the electrical and plumbing systems, whereas contents coverage protects your personal stuff, including furniture and gadgets. It is crucial to realize that flood insurance does not often cover finished basements.

If you need to transfer things due to a flood, your insurance should cover the items for up to 45 days to safeguard against damage. Flood coverage does, however, have some notable exclusions. Policies will not cover damage to lawns, trees, fences, or any money or deeds left behind.

Furthermore, flood insurance coverage is restricted to damage caused by weather-related flooding and does not cover damage caused by broken water pipes, dishwashers, washing machines, or a water main break.

How Much Does Flood Insurance Cost?

You must pay the insurance company for your flood insurance coverage each year. This payment is known as a premium.

The average one-year cost of National Flood Insurance Program (NFIP) flood insurance in a high-risk flood location is around $700. NFIP insurance is frequently the only flood insurance you can get.

If your property is at a low or moderate danger of flooding, you will most likely pay less. You are most likely eligible for the NFIP Preferred Risk Policy in those places. For example, you may be able to get a policy that covers $200,000 in structural damage to your house and $80,000 in damage to its contents for around $400 per year.

Where to Get Flood Insurance

When you’re shopping for flood insurance, it’s crucial to compare several insurance providers. There are three major sources of flood insurance: the National Flood Insurance Program, the private market, and a few specialized insurers.

The National Flood Insurance Program, which is run by the federal government, offers policies that cover up to $250,000 in damages, including $100,000 in contents coverage. NFIP policies are designed to cover the first $100,000 in flooding losses, but you can purchase additional coverage for your home and personal possessions, up to $500,000 in damages.

You should shop around to evaluate your options and rates because many insurance companies are writing their own policies. Private flood insurance is completely insured and backed by private insurers and may typically be purchased as a separate policy or an add-on to your homeowners insurance. Some insurance companies also provide extra flood insurance to enhance the NFIP’s coverage.

Conclusion

When it comes to flood insurance, it is better to be safe than sorry. You’d be wise to talk to an insurance agent and learn where you stand in terms of flood insurance coverage.

Higher-risk locations in the U.S. are the most expensive, but if you live in an area that is more susceptible to flooding, it is definitely worth the peace of mind to obtain flood insurance.

At 5280 Insurance we’re committed to a local experience. That’s why when you call us, you’ll speak immediately with a real person. We don’t have automated systems. We don’t have long wait times. We don’t transfer you to multiple departments. Calling us is like calling a friend. We’re here for you, and we aren’t going anywhere. Get a flood insurance quote in Colorado from us today!

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