3 Things To Consider About Flood Insurance
When it comes to protecting your home from flooding, a flood insurance policy is essential. Your homeowner's insurance will cover water damage that comes from a broken pipe or other accidental cause, but it won't cover all types of water damage related to the weather. While your policy may cover wind-driven rain, flooding requires a separate flood insurance policy. Here are three things that you should consider when it comes to flood insurance.
Whether It's Necessary
One mistake that many homeowners make is thinking that they do not need flood insurance because their home has never flooded before. Sometimes severe flooding only occurs every few decades, and your home may not have been built yet. However, if those conditions set up again and you do not have flood insurance, you will be on the hook for the damage and cleanup. If you live in a high-risk area, flood insurance is a no-brainer. However, those who live in moderate and low-risk areas may be tempted to skip flood insurance. However, 20 percent of claims come from these areas, so if you're in doubt, get flood insurance.
Federal Government Versus Private Insurer
Another thing to consider when it comes to flood insurance is whether you want to go through the federal government or a private insurance company for your policy. There are pros and cons to each option. Private insurance companies tend to offer higher claim limits and shorter waiting periods. However, private insurers also cannot renew or drop your policy. Insurance from the federal government requires a waiting period of 30 days but is available to everyone and is very reliable. Federal flood insurance also covers rebuilding only up to $250,000.
Excess Flood Insurance Is Possible
If you want the best of both worlds when it comes to flood insurance, an excess coverage policy is a good idea. You can get federally backed insurance that covers you up to $250,000 and then purchase a private policy for any additional coverage that you require. If you have a mortgage and live in an area prone to flooding, your lender may require federally backed insurance and excess flood insurance to protect your home adequately.
If you are looking into flood insurance, there are a few things to consider. First, while you may think that your home is not vulnerable to flooding, it can still happen, and a flood insurance policy is a good idea. You also have options when it comes to flood insurance. You can go with government-backed insurance or go with a private flood insurance company. Excess flood insurance is also an option.
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