Flooding can happen in any location at any time. Even though many people associate floods with coastal properties, flooding can take place inland as well. That is why you always need to take a look at the map to figure out whether your property is located in a flood zone. There are some situations where your lender might require you to purchase flood insurance. What do you need to know?

What Is Protected And What Is Not?

When you purchase flood insurance, there are three broad components that you should examine. You need to check and see whether the policy covers the building, the contents of your home, and potential replacement expenses. Flood insurance policies generally insure any physical damage done to your house as well as any belongings you have inside your home. This might include your walls, household appliances, plumbing system, electrical system, clothing, and furniture.

On the other hand, most flood insurance policies do not cover your outdoor structures. For example, they will not protect your patio, swimming pool, fence, or vehicles parked outside the home.

What Is Your Flood Risk Level?

Your flood insurance premium will vary depending on where you are located. For example, if you are in a flood zone, your flood insurance premiums will probably be significantly higher; however, a significant percentage of flood claims occur in areas that are not located in a flood plain. While your premium should be lower, you may want to talk to your real estate agent to see whether it is worth it to purchase flood insurance.

Is Flood Insurance Required?

Flood insurance has its limitations, just like any other insurance policy. Therefore, you might be wondering whether it is required.

If it is required, it would be required by your lender. If your house is located in a flood zone, there is a significant chance that your lender will require you to purchase flood insurance as a requirement for financing. If you refuse to purchase flood insurance, then your lender might refuse to finance your property. You should always compare flood insurance premiums across different companies before you decide which one to go with. Be sure to compare policy coverage options and limitations as well. 

Filed under: Real Estate by Julie Woodward
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Homeowner’s insurance rarely covers damage from floods. Instead, it typically covers damage from burst pipes, rain, or other forms of water damage. If you live in a designated flood zone, you are probably required by your mortgage lender to buy flood insurance, but it may be worth having – even if you’re not in a high-risk area. About 25 percent of flood claims are for homes not in a flood plain.

Flood Coverage

While flood insurance may not cover everything, it does offer coverage for your personal possessions and your home’s physical structure.
A NFIP flood insurance policy will cover the cost to rebuild your home or the actual value of your home, whichever is less. This includes the home and foundation, HVAC system, plumbing, eletrical, detached garages, carpeting, and more. Items like appliances, clothing, furniture, and valuables are covered by a personal property policy.

Filed under: Blog by Julie Woodward
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