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Flood Insurance - What You Need to Know
Whether you are building a new home or simply moving into a new neighborhood, you should consider purchasing flood insurance. Not only will this provide financial relief in the event of a flood, but it may also be required by your lender. This insurance will cover the cost of rebuilding your home after a flood and can also protect your personal belongings.
The National Flood Insurance Program (NFIP) is a federal program that was created in 1968 to manage flood risk in the United States. View here on how the program offers a variety of insurance options to help property owners in high-risk, moderate-risk and low-risk areas. It is administered by the Federal Emergency Management Agency (FEMA), and it is available to individuals and businesses in communities that have agreed to participate in the program.
The NFIP has a website that allows you to find out if you live in a flood zone, or to apply for insurance. You can also view a map that allows you to see where your home is at risk of flooding. It's also possible to apply for a policy on the phone. The cost of flood insurance will depend on several factors, including the risk, the size of your home, and the location of the home.
The most common question that people have when they are buying flood insurance is what is covered under the policy. This coverage can vary from company to company, so make sure to check with your insurance agent. For instance, your policy may not cover items such as portable air conditioners and microwave ovens. In some cases, the amount of coverage for these items may be less than the actual value of the item.
If your home is in a low-risk flood zone, you may be able to save money on your policy by opting for a "preferred risk" policy. These policies offer the same coverage as standard flood insurance policies, but at a lower price. For example, a preferred risk policy will cost you about $119 a year for up to $20,000 in coverage.
The other thing to consider when shopping for flood insurance is how much coverage you need. A standard flood insurance policy provides up to $250,000 for a single family home. However, it will only pay out up to $100,000 for renters' properties. For detached buildings, you will need a separate Building Property policy.
In addition to the NFIP, there are many private flood insurance companies that offer coverage. These companies will vary based on the location and the amount of coverage that you choose. They will also have different prices. Some private companies offer a Write-Your-Own (WYO) program, which allows policyholders to write their own policy. Those who opt for the WYO option have a 30-day waiting period before the coverage takes effect. If the insurance company deems that you have not filed a claim within the designated time frame, your insurance may be voided. Get additional reading on importance of flood insurance cover.
When comparing flood insurance policies, make sure to check with your insurance agent for advice on which type of insurance is best suited for your needs. For instance, a standard policy will cover you for flood damages up to $100,000. However, if you live in an area that is known to experience heavy flooding, you should consider purchasing additional flood insurance. Here is a post with a general information about this topic, check it out: https://en.wikipedia.org/wiki/History_of_insurance.