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<p class="has-black-color has-text-color has-large-font-size">Homeowners insurance doesn't cover flooding; you will need a flood insurance policy to provide any coverage. Flood insurance is available through the National Flood Insurance Program as well as private insurers. Make sure you get the right coverage buy understanding your needs and how flood insurance works.</p>
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<p class="has-black-color has-text-color has-large-font-size">A standard homeowners insurance policy excludes damage. You'll need flood insurance to protect your home in the event of a flood. In most cases, your mortgage lender will require that you carry flood insurance if your home is located in a high-risk area.</p>
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<p class="has-black-color has-text-color has-large-font-size">Flood insurance is written through the National Flood Insurance Program (NFIP), but coverage is also available through private insurers. Most people don't know much about how flood insurance works, and after a winter of record snowfall and atmospheric rivers pounding California, many people who didn't think about flood insurance before may be looking to buy a policy.</p>
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<p class="has-black-color has-text-color has-large-font-size">Here you'll find answers to some of the most common questions about flood insurance and expert flood insurance advice to get you on the right track.</p>
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<p class="has-black-color has-text-color has-large-font-size"><strong>KEY TAKEAWAYS</strong></p>
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<ul class="has-black-color has-text-color has-large-font-size"><li>Homeowners insurance does not cover flood damage; you will need a separate policy to protect your home.</li><li>You should consider buying flood insurance if you live in a flood prone area, or a region prone to hurricanes, and you may be required to buy it by your mortgage company.</li><li>You can purchase flood insurance through the National Flood Insurance Program (NFIP) as well as private insurance companies.</li><li>The cost of flood insurance varies depending on the location of your home and whether you use a private insurance or NFIP policy.</li></ul>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="1_How_much_does_flood_insurance_cost">1. How much does flood insurance cost?</h2>
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<p class="has-black-color has-text-color has-large-font-size">The cost of flood insurance can vary dramatically depending on where your home is located and whether you use a NFIP policy or private insurance. FEMA recently released changes to flood insurance rating that will affect many homeowners at renewal time.&nbsp;</p>
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<p class="has-black-color has-text-color has-large-font-size">Flood insurance rates can range from a few hundred dollars a year into the thousands.</p>
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<p class="has-black-color has-text-color has-large-font-size">It's important to remember that NFIP policies come with some pretty heavy restrictions. Coverage limits of $250,000 mean that many homeowners will have to supplement their NFIP policy with private flood insurance in order to be fully covered.</p>
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<p class="has-black-color has-text-color has-large-font-size">Private flood insurance prices can also vary widely and for high-risk properties the premium is often a shock. As an example, to insure a house in Miami Beach, which is in the highest risk “V” zone, with a policy for $300,000 in building coverage combined with $100,000 in personal property and a $2,000 deductible can cost close to $20,000 annually.</p>
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<p class="has-black-color has-text-color has-large-font-size">If you move the same house to a low risk “A” zone that premium drops down to $3,714. This clearly illustrates how dramatically location can impact your premium.</p>
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<p class="has-black-color has-text-color has-large-font-size">Craig Poulton, CEO of Poulton Associates, which administers the Natural Catastrophe Insurance Program (NCIP), one of the country's largest private flood insurance programs, offers this rudimentary estimate for private primary flood insurance policies that would serve in place of an NFIP policy,</p>
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<p class="has-black-color has-text-color has-large-font-size">“The price range based on actual exposure to flooding in rough terms could be seen as being approximately $.05 per hundred dollars in value for risks that are located in extremely low hazard areas up to risks that would not be accepted at any price by a logical insurer, such as risks which are experiencing flooding virtually every year. Risks, which are located in more highly exposed areas will usually see rates between $.30 per hundred and $.90 per hundred depending on how severe the exposure is,” Poulton says.</p>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="2_Do_I_need_flood_insurance">2. Do I need flood insurance?</h2>
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<p class="has-black-color has-text-color has-large-font-size">When it comes to flood insurance, location is the number one consideration. If you live in a flood prone area, or a region prone to hurricanes, you should absolutely consider flood insurance.</p>
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<p class="has-black-color has-text-color has-large-font-size">"Most homeowners policies do not include coverage for damage due to flooding caused by storms, the overflow of rivers and other bodies of water, or other natural disasters," says Ann E. Myhr, Senior Director of Knowledge Resources at The Institutes. This makes flood insurance a must have to fully protect your home.</p>
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<p class="has-black-color has-text-color has-large-font-size">"Purchasing flood insurance should always be considered as part of an overall insurance program. Those living in areas of a high flooding hazard that carry a mortgage on their property would be required by their lender to purchase and maintain flood insurance. Otherwise, the decision to carry flood insurance is optional, but important to consider," Myhr. says</p>
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<p class="has-black-color has-text-color has-large-font-size">Brad Goldsberry, with The Nate Bingel Agency in Northglenn, CO, suggests answering these questions about your property when considering flood insurance:</p>
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<ul class="has-black-color has-text-color has-large-font-size"><li>Has your property ever flooded?</li><li>Are you located in a 100-year flood plain?</li><li>Do you have a basement?</li><li>What's your risk tolerance?</li><li>Can you afford flood insurance?</li><li>Can you afford to not have it?</li></ul>
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<p class="has-black-color has-text-color has-large-font-size">While flood insurance can be sort of pricey, especially if your home is on a waterfront, it can be a financial lifesaver if your home is severely damaged or destroyed by flooding.</p>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="3_Where_do_I_buy_flood_insurance">3. Where do I buy flood insurance?</h2>
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<p class="has-black-color has-text-color has-large-font-size">When it comes to flood insurance, there are only two choices and one comes with pretty significant limitations.</p>
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<p class="has-black-color has-text-color has-large-font-size">NFIP is the main player in flood insurance. "Flood insurance is backed by the federal government through the Federal Emergency Management Agency (FEMA). FEMA does not write flood insurance directly, policies must be written through a licensed insurance agent. These policies are guaranteed by the government as they pay for the losses if something were to happen," advises Goldsberry.</p>
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<p class="has-black-color has-text-color has-large-font-size">Myhr offers the following tips when shopping for flood insurance:</p>
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<ul class="has-black-color has-text-color has-large-font-size"><li>The FEMA website is a good source of information on flood insurance requirements. This site includes an interactive map that indicates areas that are more prone to flooding than other areas and consumers can enter their address to assess their individual exposure to flooding.</li><li>In order to be eligible for NFIP coverage, the property must be located in a participating community. This information is also available on the website.</li><li>There are limitations to NFIP policies. The NFIP provides building coverage for dwellings up to $250,000 and contents coverage up to $100,000. NFIP policies include a 30-day waiting period for newly issued policies.</li><li>Private flood insurance is another option. In many cases, it offers more robust coverage options. Private flood insurance enables property owners to supplement or replace the NFIP product, providing coverage that homeowners expect from their homeowners policies for exposures, such as outdoor property, detached structures, swimming pools, and basements.</li></ul>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="4_What_coverage_levels_do_you_need">4. What coverage levels do you need?</h2>
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<p class="has-black-color has-text-color has-large-font-size">Flood insurance, like all homeowners insurance, protects your home up to the coverage levels you choose. The main issue with NFIP policies is that the top coverage level is only $250,000. So, if your home will cost more than $250,000 to rebuild, you will be paying the difference out of your own pocket.</p>
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<p class="has-black-color has-text-color has-large-font-size">Private flood insurance policies offer much higher limits. "Private flood insurance policies can often write coverage up to $2 million with personal property coverage of $1 million," says Roger Desjadon of Florida Peninsula Insurance.</p>
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<p class="has-black-color has-text-color has-large-font-size">"Compared to the NFIP, private market insurers are able to offer higher limits of coverage in excess of $250,000 as well as broader coverage for other structures on your property," says Thomas L. Santamorena, an insurance agent in San Francisco.</p>
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<p class="has-black-color has-text-color has-large-font-size">The bottom line is that yo need to consider the private flood insurance market if your home is worth more than $250,000.</p>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="5_Will_flood_insurance_cover_personal_property_in_your_basement">5. Will flood insurance cover personal property in your basement?</h2>
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<p class="has-black-color has-text-color has-large-font-size">Surprisingly, in most cases, flood insurance doesn't cover damage to your basement or any personal property that is stored in the basement.</p>
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<p class="has-black-color has-text-color has-large-font-size">"The NFIP Dwelling Form excludes coverage for items located below the lowest elevated floor or in a basement. There are some exceptions for heating or cooling equipment permanently installed and connected to a power source," Myhr. says</p>
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<p class="has-black-color has-text-color has-large-font-size">"The purpose of this exclusion is to mitigate costs by encouraging homeowners to avoid storing property in areas of the home that are most likely to suffer flood damage," she says.</p>
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<p class="has-black-color has-text-color has-large-font-size">It's not just basements that are excluded. "Swimming pools including related equipment, such as pumps or filters as well as outdoor hot tubs and spas that are not considered bathroom fixtures, are also not covered," Myhr says.</p>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="6_Does_flood_insurance_cover_additional_living_expenses">6. Does flood insurance cover additional living expenses?</h2>
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<p class="has-black-color has-text-color has-large-font-size">Additional living expenses coverage helps pay for costs that are related to moving out of your home if it is destroyed or too damaged to live in during the repairs. It covers costs, such as hotel bills, restaurants, laundry, and even dry cleaning until you can move back into your home.</p>
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<p class="has-black-color has-text-color has-large-font-size">Unfortunately, flood insurance from the NFIP doesn't cover additional living expenses. However, private flood insurance often does.</p>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="7_What_are_flood_insurance_personal_property_coverage_limits">7. What are flood insurance personal property coverage limits?</h2>
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<p class="has-black-color has-text-color has-large-font-size">Personal property coverage will help replace your personal belongings that are damaged or destroyed due to flooding. While all homeowner policies have coverage limits when it comes to personal property, it's usually a percentage of your home's total coverage amount.</p>
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<p class="has-black-color has-text-color has-large-font-size">Flood insurance that is purchased through the NFIP caps all personal property at $100,000. That may seem like a generous amount. However, if your home is completely destroyed and you had to replace all of your worldly possessions, $100,000 may not go that far.</p>
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<p class="has-black-color has-text-color has-large-font-size">In addition to coverage caps, NFIP policies insure personal property at actual cash value (ACV), which takes depreciation into account when determining the value of your property. This means that your 10-year TV will be worth almost nothing.</p>
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<p class="has-black-color has-text-color has-large-font-size">Flood insurance in the private market often has much higher limits. "As an example, policies with Florida Peninsula offer personal property coverage up to $1 million," Desjadon says. In addition to higher personal property limits, private flood insurance also offers replacement value coverage, which will replace your property with similar quality products, regardless of cost or depreciation.</p>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="8_What_is_the_flood_insurance_waiting_period">8. What is the flood insurance waiting period?</h2>
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<p class="has-black-color has-text-color has-large-font-size">NFIP policies require a 30-day waiting period from payment for the policy to when the policy goes into effect. However, there are a couple of exemptions:</p>
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<ul class="has-black-color has-text-color has-large-font-size"><li><strong>New loans:</strong>&nbsp;According to the NFIP website, "If the initial purchase of flood insurance is in connection with the making, increasing, extending, or renewing of a loan, there is no waiting period. Coverage becomes effective at the time of the loan, provided application and payment of premium is made at or prior to loan closing."</li><li><strong>Revised flood maps:</strong>&nbsp;The NFIP site says, "If the initial purchase of flood insurance is made during the 13-month period following the effective date of a revised flood map for a community, there is a 1-day waiting period."</li></ul>
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<h2 class="has-black-color has-text-color has-extra-large-font-size" id="Final_tips_for_buying_flood_insurance">Final tips for buying flood insurance</h2>
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<p class="has-black-color has-text-color has-large-font-size">Here are a few final tips regarding flood insurance:</p>
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<ul class="has-black-color has-text-color has-large-font-size"><li>"Tenants in apartment buildings and condominium owners are not covered for flood damage to any personal property under their landlords' or condominium association insurance. It is important to consider purchasing separate coverage for such property under a flood insurance policy, particularly if the property is in a high-hazard location, such as coastal areas or lakefront property," Myhr says.</li><li>"Insurance policies do not cover all of the possible financial impacts resulting from a flood or other loss, such as a fire or windstorm. Consumers should have a contingency fund in place to pay for deductibles and other costs related to an unanticipated event," Myhr. says</li><li>The most important misconception with flood insurance is that purchasing a policy means "everything is covered". A standard flood insurance policy was developed with the intention of restoring a home to 'livable' conditions - a warm, dry place that is safe to live. It will help with the most important elements of the loss, but it is not as comprehensive as a homeowners insurance policy.</li></ul>
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<p>To read the full article, <a href="https://www.insurance.com/buying-flood-insurance">click here.</a></p>
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