Flood Insurance

What is flood insurance?

It is a type of insurance that covers physical damages caused to personal property due to inclement weather, namely floods. This type of is not as popular as other types of insurance due to the fact that only around 20% of properties within the country are at risk of flooding.

Who is it for?

Flood Insurance is for anyone who wants it. However, those who live in flood plains or in lowland areas need it more than those that live at higher elevations, due to the increased risk of flooding in those locations. Certain areas that are very prone to flooding actually require insurance by law; to determine if it is required in your area, check with the FEMA website. Their topographical maps show likelihood of flooding. You can also check with the local city council to determine local laws on the subject.

How does it work?

Flood insurance covers homes and properties suffering from what is defined as ‘direct physical damage’ as a result of floods. If you must file a claim, it works like any other form of insurance; an adjuster will inspect the property to ensure that everything claimed on the form lines up with reality, and then the homeowner must provide a ‘proof of loss’ form to the insurance company within sixty days. Most insurance is paid in a single, annual premium, although some people opt for monthly payments to help make it more affordable.

What are the different types of coverages?

It is divided into different categories. Most insurance covers the buildings themselves; a separate policy can be taken out to cover the items of value within the home. Another type of policy applies only to homes with a basement, while a separate policy covers those that do not have a basement.

What are major benefits?

The biggest benefit of having insurance is the peace of mind that comes with it. It provides you with the assurance that, even in the event of a flood, your home and belongings are covered. The annual premium is an average of $600, where the cost of damages from a standard flood far exceed $25,000. Even if you were to pay the premium for 40 years, you would not still not equal the cost of damages. Insurance protects your investments.