Flood Insurance

In 2006, 1/3 of all flood insurance claims were submitted by people living in low-to-moderate risk areas.  Flooding results from heavy or prolonged rains, coastal storm surge, snow melt, blocked storm drainage systems, or other causes. It can be wide-spread or localized. To be considered a flood, the waters must cover at least two acres or affect at least two properties.

Using tools at www.floodsmart.gov homeowners can assess their flood profile, estimate what a flood could cost, the types of policies available and find tips on preparedness and recovery.

Even a few inches of water can bring thousands of dollars in repair and restoration costs. Most homeowners insurance does not cover floods. You need flood insurance.

Flood insurance, like earthquake insurance, is “single peril” insurance, sold separately from homeowners insurance. Flood insurance is available both within and outside of floodplains. Your property’s flood risk is shown on flood hazard maps. Different types of policies are available depending on your flood risk.

If you live in a high-risk area, you will need a Standard Policy. Most mortgage lenders will require that you have such a policy before they will approve your loan.

Outside of high-risk areas, flood insurance is also available, usually at lower cost. A Preferred Risk Policy covers both a home and its contents, with premiums as low as $119 per year. While you aren’t federally required to have flood insurance in a low-to-moderate risk area, that does not mean you won’t ever need it. Large floods often extend beyond the boundaries of high-risk areas and smaller floods occur outside high-risk areas as well.

Flood insurance is sold and serviced by private insurers, and backed by the federal government. More than 85 companies sell flood insurance. Often the same insurance agent who wrote your homeowners insurance policy can help you obtain flood insurance. Flood insurance costs the same wherever you purchase it, because the rates are set by the National Flood Insurance Program.