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However, if you file a claim you’ll have to cover the difference in damages out of pocket. Like most insurance plans, if you opt for a higher deductible you’ll pay less for the insurance. There might also be additional insurance assessments per year depending on if you’re in an area prone to flooding and water damage. Additionally, just one inch of water can cause extensive damage to your property, according to FEMA.ĭepending on where you live and what your policy covers, flood insurance can start at $80 per month on average. Some 30% of all flood insurance claims come from households in low- to moderate-risk areas. Alternative living expenses coverage is available, depending on policy and insurance companyĮven if you’re not required to have flood insurance, it’s worth considering the risks before you decide to go without it.Policy holders can get insurance up to 100% of property value and personal belongings inside the home.The disadvantage of private flood insurance is that the insurance company can cancel your policy.
Private flood insurance is available for people who don’t live in participating NFIP communities or want more insurance coverage. There’s no coverage for alternative living arrangements.The NFIP will pay up to $250,000 for damage to your home and an additional $100,000 maximum for items inside the home, such as clothing, furniture and electronics, freezers (and the foods within them) and other valuables.For people with expensive real estate or high-dollar personal belongings, the disadvantage of NFIP insurance is that the maximum coverage might be too low.Meets minimum requirements for government-backed mortgages.The advantage of the NFIP insurance is that it’s backed by the government.Currently, the NFIP is available in 23,000 communities. National Flood Insurance Program (NFIP)Ĭonsumers can get the NFIP flood insurance if their community participates in the program. There are two basic types of flood insurance you can get: the government-backed option which is called the National Flood Insurance Program (NFIP) or private flood insurance. You’ll have to get a separate flood insurance policy. Two Types of Flood Insurance Availableįirst, it’s important to note that standard homeowners insurance and renters insurance policies do not cover flooding. If you’re using a government-backed mortgage (this includes Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA) loans) for a property in a high-risk flood zone then you will be required to get flood insurance.įor buyers who purchase property outside of high-risk zones, lenders might still require flood insurance in order to secure a mortgage, even though it’s not federally mandated. Some Properties Must Have Flood Insurance According to FEMA, despite their low- to moderate-risk, one in four flood claims occur in these areas.They’re not in immediate danger from flooding caused by overflowing bodies of water or hard rains.They’re considered low- to moderate-risk flood zones.These zones include B, C, X Pre- and Post-FIRM.Property in SFHAs must have flood insurance.The National Flood Insurance Program’s (NFIP’s) floodplain management regulations must be enforced in these areas.They have at least a one-in-four chance of flooding during a 30-year mortgage.These zones start with the letters A or V.During the span of a 30-year mortgage, these areas have at least a one-in-four chance of flooding.įEMA has designated two main types of flood areas: Special Flood Hazard Areas (SFHAs) and Non-Special Flood Hazard Area (NSFHA). This 1% chance flood is also known as the base flood or 100-year flood. Areas with a 1% chance or higher of flooding are considered high risk. The maps offer a risk calculation based on past events and flood patterns.Īccording to FEMA, there’s no such thing as a “no-risk zone,” but buyers can see how prone their property is to flooding using the flood maps. Homebuyers can check the Federal Emergency Management Agency (FEMA) website for the flood maps in their neighborhoods. Depending on the level of threat your property is exposed to-low-, moderate- or high-risk-you can face higher insurance premiums as well as potential damage to your home. All areas are prone to flooding, but some are at higher risk than others.
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