There are many types of insurance to obtain for you and your family during a lifetime. There are policies for your vehicles, your property, and your life. There’s even insurance to take care of you when you become disabled later in life and fire insurance if you live in an area prone to wildfires. But what about flood insurance?
Only 20% of households in the United States own flood insurance, yet these locations registered more than $3 billion in claims between 2003 and 2012. With the Federal Emergency Management Agency (FEMA) changing the flood maps for various regions across the country, more people are being asked to add this insurance to their portfolio. The question is if you need flood insurance? Here are a few things to consider before picking up the phone.
What is Flood Insurance?
Flood insurance covers against property loss from flooding, whether it’s a few inches of water in the basement or a total loss. More specifically, flooding is defined by the National Flood Insurance Program (NFIP) as a temporary condition of partial or complete inundation of two or more acres of normally dry land area or two or more properties, one of which is your own. The flooding must come from and overflow of inland waters, unusual and rapid accumulation or runoff of surface waters from any source, and mudflows that can be brought on by a number of natural events. These include landslides, hurricanes, or earthquakes.
To qualify for flood insurance you must have a mortgage on a property you own or reside in. That’s the easy part. The hard part is determining whether or not you live on or near a floodplain or lowlands that are susceptible to flooding. This information is discovered at the time your request the insurance. The agent you deal with will go through topographical maps of your area to determine where your property lies and its risk of flooding.
How Much Does it Cost?
The price of flood insurance depends on the area you and your young family live. High risk areas where flooding occurs regularly will cause a considerable spike in the annual premiums. Lower rates will apply when your property is positioned in a lower risk area. Like your auto or regular home insurance policy, premiums vary depending on your deductibles. In the end, what you decide to pay is determined by the value of your property and how much of it you want to protect in case of flood.
How do I Obtain Flood Insurance
Those interested in getting additional information on flood insurance, including quotes, can head to the NFIP website. Here you’ll be able to find an agent that deals in flood insurance and estimate your annual premiums.