A horrible storm brushed through your area. You never bothered with buying flood insurance because you don’t have a coastal home. Now, you’re wishing that you did.
When you wake up in the middle of the night, you step into a huge puddle on the floor. Your house is soaked, and many of your things are destroyed. What are you supposed to do now?
Well, the first step is to get insured, so you’re better prepared next time. Before you go shopping around for policies, it’s important that you get informed about what it covers and how it works.
We can help with that. Check out this guide to learn everything that you need to know about flood insurance.
What Is Flood Insurance?
As the name suggests, flood insurance protects your house from flooding. It doesn’t only take care of heavy rainfall and natural disasters. It will also protect your home in the event that a dam bursts.
Many people are under the misconception that their regular home insurance covers flood damage, but it doesn’t. It handles water damage that results from, say a pipe burst, but not rainfall. You’ll have to open a second policy for that.
How Does It Work?
Flood insurance works the same way as opening up any other type of policy. After shopping around for a while, you’ll get an account with your chosen company.
They’ll charge you a monthly premium that you’ll pay to keep your house insured. If a flood happens, they give you the cash that you need to cover the damages and replace anything that was destroyed.
Most of the time, there’s a short waiting period before your policy kicks in. If you’re buying the policy while you’re trying to renegotiate your new home loan or if your house suddenly becomes a high-risk flood zone, the insurance company may be willing to wave the wait time.
So, now let’s get into the big question. What’s covered under a basic flood insurance policy? You can get the money to replace items inside your home, such as your washing machine, dryer, microwave, window blinds, portable air conditioner, curtains, furniture, and electronics.
You can also get your flooring and solar-powered energy system fixed up under a policy. There’s a little grey area if you need to have your entire home worked on.
You have to use the home as your primary residence for at least 80% of the year. If you don’t, you may have to fork over some of the money in your pocket for your repairs.
Your policy also won’t cover any furniture that you have stored in below-ground areas such as your basement. You also can’t get a replacement for a destroyed car or valuable paper items like cash or your birth certificate.
If you have a garage that’s detached from your home, your insurance will handle it. This doesn’t mean that it will cover everything that’s outside of your house. If the water damage destroys your deck, for example, you’ll be out of luck.
Having Flood Insurance Might Be a Requirement
Homes that are located on the coast have no choice but to get insurance because they’re in an AE flood zone. Coverage is required by the mortgage loan lenders.
If you’re not in one of these danger zones, you don’t have to open a policy, but we still recommend that you do. You never know when an emergency is going to occur. It’s better to be safe than sorry.
The Average Cost of Insurance
The cheapest way to get flood insurance is through the NFIP. If you live in a low-moderate risk zone, you may only have to pay 100 dollars a year or so.
If you live in a high-risk area, the price is more expensive because there’s a larger chance that your home will flood. That means you’ll cost the company a little more money.
There’s also a 30 wait period that you have to worry about. This means you shouldn’t wait until the very last minute to try and open your policy.
Private Flood Insurance
If you don’t want to go through the NFIP to get your insurance, you could go with the non-government option. Private insurance isn’t available to those in all states.
The policies are often more expensive than what the NIFP charges, but the prices do vary from company to company. If you want more coverage, you have that option.
You won’t have to rush as much to open a private policy. There’s still a waiting period, but in most cases, you’ll only have to wait for 14 days.
Find Out How At-Risk You Are
Before you buy a policy, you should do your homework. You don’t want to buy more insurance than you’re ever going to use. The first step is to find out what flood zone your new house is in.
After that, check out your paperwork. A seller has to inform a buyer of any flood-related risks that the home comes with. For example, low drainage.
They also have to tell you if the house has ever flooded before. If it has, it might be a good idea to account for that by opening a larger policy.
Everything You Need to Know About Buying Flood Insurance
Buying a house is a huge investment. You’ll need to protect it by getting a homeowners policy, and if you moved to a high-risk area, you should also get flood insurance.
Many people are under the misconception that the latter comes in a package with the former, but that can’t be further from the truth. Don’t wait until it’s too late to open a second policy, and visit our blog for more ways to protect your home.