Flood Insurance

If you happen to live in a high-risk flood area, then you might be required to have flood insurance for your home or place of business. This type of insurance will be your first line of defense against many different types of water damage that might not be covered by your current policy. Here is a quick look at exactly how this insurance works and who it is designed for.

Who Needs Flood Coverage?

There are a number of different federal agencies that homeowners can contact to determine if they are in a high-risk area. You can also speak with an experienced insurance agent to explore your coverage options. Those who live in a high-risk area should realize that this type of coverage often takes at least 30 days to activate. That means you won’t be able to add it to your current coverage just as a large storm is moving in. Anyone who resides in a low-risk area will need to weigh the cost of coverage against the likelihood of flood damage taking place.

What Is Covered?

This type of insurance covers damage from heavy rainfall, but it won’t help you pay for repairs if a local body of water has flooded your home. The vast majority of flood riders are offered through the National Flood Insurance Program (NFIP). You and your insurance agent can work with this program to determine how much coverage you need, but most basic policies cover $250,000 in structural damage and $100,000 in personal property damage. You can also increase or reduce your coverage as needed.

Types of Flood Policies

If you need more than $350,000 in total coverage, then you might want to consider an excess flood rider. This particular type of rider is designed for homeowners who have more expensive homes or expensive items within their homes. You can also upgrade your coverage if you live near a lake or river that is prone to flooding. While your premiums will be slightly higher, your insurance could prevent a major financial catastrophe in the event of a flood