Depending on the location of your home, you may be required to purchase flood insurance. Many insurance companies won’t cover a home that sits in a flood zone if the owner doesn’t have flood insurance. Regular renters and homeowners insurance do not cover damage from flooding. A homeowner must purchase a separate flood insurance policy. The only flood insurance policies through the federal government cover any flood-related losses or damage.
The Federal Emergency Management Agency (FEMA) runs the National Flood Insurance Program (NFIP). This insurance is sold by private insurance companies but the coverage is provided by the federal government.
It isn’t difficult to purchase flood insurance. Private insurers will often work with the Federal government to offer flood insurance. In order to get flood insurance, the home must be located in a community which participates in the NFIP. There are currently about 100 hundred insurance companies which sell NFIP policies.
Flood insurance doesn’t cost much and is important to have if there is a possibility of flooding in your area. The average annual cost is around $140 a year. This premium will increase according to the amount of coverage required and the likelihood of a flood. The maximum amount of insurance under the NFIP is $275,000 for structural damage and another $100,000 for personal property loss.
Homeowners must wait 30 days after purchase before flood insurance takes effect. There are more than 20,000 communities across the country which are part of the NFIP. If a homeowner isn’t sure about their area, they can check with the online FloodSmart Tool by entering their zip code.
It is also possible to purchase excess flood insurance from private insurance companies. This insurance will cover losses over and above what the NFIP insurance covers. A homeowner must have NFIP flood insurance before they can qualify for excess flood insurance.