Do You Need Flood Insurance?

Most homeowners are not aware that their existing homeowner's insurance policies do not cover damage due to water from floods. Floodwaters can come from many things such as overflowing rivers, titled surges, clogged storm drains, as well as aggressive storms such as hurricanes. Unless you're home is covered by a flood insurance policy, correcting the damage caused by flooding is totally your responsibility. Depending on the specific policy, flooding damaged due to sewer leakage may not be covered. Certain insurance carriers, such as Farmers, State Farm, as well as Allstate offer special endorsements that can be added to an existing policy to cover such damage. Normally damage caused by sewer problems is attributed to poor home maintenance and as such insurance companies do not cover damage.

If you choose not to obtain flood insurance from the insurance provider that you have obtained your homeowners policy from, the national flood insurance program offers similar coverage. The simplest type of coverage offered is called a single peril policy. This type of policy will pay homeowners to repair their homes and restore their belongings yes a natural disaster causes flooding that damages normally two or more residential properties. This type of restriction is usually not present with flood policies that are obtained through traditional insurance carriers. After the major flooding caused by hurricane Katrina and hurricane Rita many insurance carriers are reluctant to the issue new flood policies in flood prone areas.

Despite this fact, homeowners are normally required to obtain flood insurance by rules set from their lenders. Many lenders will not provide a mortgage on a home in a flood prone area that is not adequately covered. These flood prone areas are normally described by areas on a map called flood plains. Depending on the area of the country in which you live, these floodplains are described and maintained on a city, county, or even perish by parish basis. Contact your local tax assessor or city governments to find out more information regarding your home's flood plain status. If you happen to live in a less flood prone area and you may qualify for a different type of policy normally called a preferred risk policy. A preferred risk policy can be issued to homeowners live in areas that do not normally flood and will pay lower premiums on average. Keep in mind one very important fact when shopping for flood insurance. Most if not all policies do not provide coverage in the first 30 to 60 days of the policies lifetime. This waiting period ensures a homeowner cannot simply purchase coverage immediately before a natural disaster occurs in their area.

References:

http://www.fema.gov/business/nfip/