Just a few inches of water from a flood in your home can cause tens of thousands of dollars in damage. If you are ever unfortunate enough to experience a flood in your home state, town, or home, it can be a financially devastating event. Over the past 10 years, the average flood insurance claim has amounted to over $33,000. People without flood insurance would have to go out of pocket to cover these costs or go without much needed repair and restoration of their homes. This is why flood insurance is so important.
Flood insurance is available to homeowners, condo/co-op owners, and renters of homes, apartments or condos/co-ops. Policies provide coverage for buildings and their contents, and are available in a number of different plans with different costs and coverage levels. If your home is in a high-risk flood area and you obtained your mortgage through a federally regulated or insured lender, you’re required to purchase a flood insurance policy.
Most homeowners living in moderate-to-low risk areas for floods are eligible for coverage at a preferred rate. The lowest premiums are called Preferred Risk Policies which bundle home and contents coverage and are available through the National Flood Insurance Program, starting at just $119 per year. This is a small price to pay if you are faced with a flood damage repair bill of $30,000 or more. Even if you don’t qualify for a Preferred Risk Policy, a standard rate policy can still be purchased. You may think that just because you don’t live in a high risk are, you don’t need flood insurance, but statistics show that nearly 25% of all NFIP flood claims occur in moderate-to-low risk areas.
If you do live in a high risk area, you still have options. There are separate policies which will cover damage to your home and for its contents. The Dwelling Form provides insurance for buildings with one to four units, including single-family condominium units and townhouses. The General Property Form provides insurance for other types of residential and commercial buildings. Both forms provide flood insurance on contents, but you must purchase it as optional coverage.
Flood insurance premiums are calculated based on several factors:
- Year of building construction
- Number of floors
- The location of its contents
- Flood risk (Is it in a flood zone?)
- The location of the lowest floor in relation to the elevation requirement on the flood map
- The deductible you choose and the amount of building and contents coverage you choose
Renters can obtain flood insurance as well. Like home or condo/co-op owners, the amount of coverage and deductible you choose will determine your premiums. And like people who own their home most renters in moderate-to-low risk flood areas are eligible for coverage at a preferred rate. Preferred Risk Policy premiums available through the NFIP offer coverage for one low price starting at $39 per year for Contents Only coverage. High risk coverage is also available for those who don’t qualify, just as in homeowner’s coverage. The premiums are influenced by the same factors listed above. Whether you are a renter or an owner, if there’s a possibility that your home may flood, it’s good to know that affordable insurance is available to you. Not only does flood insurance make good financial sense in the long run, it will give you the peace of mind that you are covered in the event that disaster strikes in the form of rising water.
Find out more about protecting your home and contents by calling our office, or visiting our website for a free Louisville Home Insurance quote.
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