If you live in an area that experiences regular tropical storms or heavy rain showers, you might be surprised to learn that standard renter or homeowner insurance exists Flood damage is not covered. While you can add an individual flood insurance policy issued by the Federal Emergency Management Agency (FEMA), it will add hundreds of dollars a month to your home insurance premium.
Because of the high cost, most homeowners only take out flood insurance if the mortgage lenders require it. However, if you live in a flood area, the cost of flood insurance may apply pale in comparison to the price of restoring your home’s structure major water damage. If you do decide to buy flood insurance, we at the Home Media Review team recommend getting multiple quotes to compare and choose the best plan.
Does home insurance cover flooding?
Homeowners’ and renters’ insurances do not cover damage caused by flooding. Most standard household insurance state that water damage to carpeting, building and personal property is only covered if the water is sourced from within the home. For example, while your home insurance will compensate you for damage caused by a burst pipe, it won’t cover the same damage if it was caused by water seeping through your basement.
That doesn’t mean you have to live in fear of the next natural disaster. You can take out separate flood insurance that will add flood coverage to your policy benefits. Like home insurance, flood insurance policies have deductibles and premiums that you must consider when filing flood insurance claims.
Flood insurance is standardized by the federal government, which means insurance companies do not set prices for flood insurance. FEMA sets flood insurance premiums and deductibles after considering a site’s frequency and risk of flooding.
Home insurance providers with flood surcharges
National Flood Insurance Program (NFIP) flood insurance is issued by private insurance companies after the federal government approves the policies. You can find flood insurance from some major insurance companies. Some examples of insurers offering NFIP policy options are:
If you’re having trouble finding a flood insurance provider, you can search a full list of FEMA approved insurers offering policies here.
Who Needs Flood Insurance?
You may need flood insurance if your home is in a high-risk flood area. FEMA defines a high-risk flood zone as one with at least a 1% chance of experiencing flooding during a full calendar year. If you’re using a mortgage loan to buy a property in an area known for flooding, your mortgage lender will likely require you to have flood insurance as a condition of your loan.
High risk flood areas
FEMA has created a flood map of high-risk flood areas. To determine if you are in a flood prone area, Visit FEMA online and enter your address. You will see a map with a series of colored areas defined by zone names. If you see that your home is within the boundaries of a flood plain, you must purchase flood insurance.
How much does flood insurance cost?
Flood insurance can be expensive compared to other types of insurance because it comes with its own premium and deductible that you have to pay on top of what you pay into your home insurance. Flood insurance rates and coverage are based on the zone of your home. Homes in areas with high risk of flooding pay more for insurance coverage.
According to FEMA, the average cost of flood insurance through NFIP is $771 per year. However, the specific flood insurance rate you pay depends on the location of your home and the value of your policy. If you live in an apartment, you may be able to access cheaper flood insurance with only home contents protection. Contact a flood insurance provider in your area to explore costs and coverage options.
How can I get flood insurance?
While FEMA determines whether or not an insurance company can sell flood insurance, most policies are issued by independent insurance providers. Through the Write Your Own (WYO) program, NFIP enables more than 50 participating insurance companies to issue these policies. If your insurance company does not participate, you can purchase flood insurance directly from the NFIP. In some areas, you may be able to purchase private flood insurance with coverage limits higher than those defined by the NFIP.
To get flood insurance, first check the policy details on your homeowners insurance policy. Take a look at FEMA’s flood map to determine if flood insurance is required based on your risk. While homeowners in low-risk areas do not need to purchase flood insurance to obtain mortgage loans, anyone can purchase flood insurance.
The next step is to contact your insurance agent to request more information about flood insurance. If you already have home insurance, you may want to purchase coverage from the same provider if they offer flood protection to keep your payments simple. Your agent will explain what flood insurance does and does not cover, as well as your monthly payment.
If you purchase flood insurance through the WYO program and need to file a flood insurance claim, do so with your personal insurance policy—not FEMA. Your insurance provider will handle the verification, processing and payment of your claim.
Conclusion: Do you need flood insurance?
Whether you need flood insurance depends mainly on your location. You don’t need to buy flood insurance unless you live in a high-risk flood area. However, you cannot assume that you will never suffer flood damage unless you live in a flood area. Check out FEMA’s flood zone map and assess your individual flood risk to determine if flood insurance is worth the extra cost.