Home flood insurance may not be on the list of priorities; however, due to the circumstances of unpredictable weather conditions, it may be best to look over this information to decide if it is right for you. Many times homes around lakes are elevated enough and/or have water levels controlled by the dam, but nature can still sometimes throw you a curveball.
All of the private insurers write the flood insurance under a specified agreement that is with the federal government, which is then through the National Flood Insurance Program, also referred to as NFIP. This coverage is crucial to those who are in different areas that are subjected to potential risk of flooding.
There are some cases where flood insurance is a must. If you find that the property that you own or are interested in is located in a flood zone, then the insurance is a requirement.
Then there are homes or properties that are located near a flood zone, which will also be subject to the flood insurance requirement.
Cost of Flood Insurance
The cost of this insurance will vary depending on the location of the property or home. Just like any other insurance premium fees, the flood insurance will cost you based on the risk of the home being subjected to damage due to flooding.
If the area presents a higher risk of a flood, then the price of the insurance will ultimately be higher than that of another home that is not as close to the flood zone. How this is determined is by the insurer entering the address of the home into a database that is owned by the NFIP. Then the insurer will obtain the insurance premium for the home in accordance to the zone.
Flood Insurance Coverage
Flood insurance will cover the dwelling, as well as any of the personal property that is located inside the home during the flood. The policyholder will need to pick a deductible for the coverage just like most other types of insurance.
The insurance can be obtained as a replacement cost or an actual cash value type of policy. However, the property and some of the building items like the carpeting are adjusted on the ACV basis.
Here are a few things that are not covered by this types of insurance:
- Damage that is caused by moisture, mold, or mildew that could have been avoided.
- Currency, valuable papers, or precious metals; for example, stock certificates.
- Temporary housing during the disaster.
- Belongings or property outside of the home like trees, wells, plants, septic systems, decks, walks, patios, seawalls, fences, swimming pools, and hot tubs.
There are different ways for each company when it comes to the process of making a claim. You will need to sit down with the insurer to discuss what the policy will and will not cover, as well as how to make a claim should you need to. Always read the small print and never be afraid to ask questions.