After the many recent natural disasters taking place around the world, it only makes sense that homeowners are taking a closer look at their homeowner’s insurance policies to make sure that they are covered in the event of an accident or disaster. Flooding is the most common natural disaster that we have to worry about in the United States and it’s the most expensive, resulting in billions of dollars in repairs every year. Many Americans also have a large portion of their wealth tied into their homes, meaning that without the right flood insurance policies they could be risking financial ruin.
A Comprehensive Flood Insurance Guide
With our helpful flood insurance guide, we make it easy for homeowners to understand when it is time to invest in excess flood insurance coverage and how to find an affordable policy.
Does Homeowners Insurance Cover Flooding?
Typically, homeowner’s insurance will cover any damages caused by burst pipes and overflowing sinks, toilets and bathtubs. If your dishwasher or water heater explodes, your homeowner’s coverage should cover the costs. Additionally, homeowners insurance should also kick in if your roof is damaged during a storm and any interiors are also damaged by rain. Basically, you are covered under this type of policy as long as the water originated in the home or from the sky. Any water that has entered your home from creeks, rivers or flash floods is not typically covered under home insurance or an umbrella policy.
Who Needs Flood Insurance?
If you are located in a designated floodplain opens in a new window or Special Flood Hazard Area, your mortgage lender will require that you purchase a flood insurance policy. However, even for those who are not located in one of these areas, investing in excess flood insurance coverage is a smart move. In fact, the Insurance Information Institute opens in a new window shows that more than one-fifth of flood damage claims are made by policyholders who live in a low-to-moderate risk area.
How Does Flood Insurance Work?
Sold only through licensed insurance agents, national flood insurance is administered by the federal government. Unlike most other types of insurance, flood insurance rates do not vary between insurers.
Homeowners can insure their homes for up to $250,000 and the personal property or contents inside for up to $100,000. For those who rent their homes, you can purchase up to $100,000 in coverage to protect your personal belongings. Any non-residential property can be covered up to a total of $500,000 for the building itself and the contents. Flood insurance also comes with separate deductibles for the building and any contents. Typically, if you choose a higher deductible, you’ll get lower premiums. But for those with a mortgage, keep in mind that your lender may not allow for any increases in your deductible.
Additionally, flood insurance coverage does not kick in immediately. In most cases, there is a 30-day waiting period before coverage begins, with a few exceptions:
- You just bought your home and your lender requires coverage.
- Your home was affected by flooding on burned federal land and you purchase a policy within 60 days of the fire’s containment.
- If your address was recently added to the SFHA map and you purchase coverage within the 13-month period following the changes.
- It’s time to renew your policy and you want to increase coverage.
Facts to Remember When Considering Flood Insurance Coverage
Still on the fence on whether or not you should look into investing in a flood insurance policy? Keep these few key takeaways in mind when looking at different flood insurance policies:
- Flooding is the most common and most expensive natural disaster affecting the US each year.
- Homeowners insurance does not typically cover flood damage.
- You can tailor your flood insurance policy to fit your specific needs and budget.
Interested in learning more about the benefits of investing in flood insurance coverage? Visit our team at Marine Agency Insurance online today to get a quote.