Home Insurance Articles
How Home Flooding Can Increase Your Home Insurance Premiums
2010-08-14
Storms, hurricanes and heavy rains cause flooding. Homeowners insurance does not cover home flooding. Flood insurance has to be purchased separately and this means additional insurance premiums.
When you buy flood insurance, you must wait 30 days before it goes into effect so don't wait until the weatherman tells you the storm is on the way. You can get this coverage through the National Flood Insurance Program. This program is administered by FEMA. About 90 private insurance companies offer flood insurance through this program. The local community must apply to join the program and show that they are managing the floodplains in the area. If your community hasn't applied to join the flood insurance program, you can petition them to do so.
If you live in such a community, you can purchase flood insurance through a local insurance agent. The program has set rates that are the same from one insurer to another. The premiums you must pay are based on the kind of home you have and how old it is and the projected risk of flooding. Rates are higher if there has been a previous claim for flooding for that home. You can find out if this is the case by requesting a Comprehensive Loss Underwriting Exchange report. It gives you a five year history of the structure. Your insurance agent can get the report for you. If you are buying a home, then have a home inspector look for signs of previous flood damage.
The insurance premiums for a flood policy can range from a few hundred dollars per year to a few thousand dollars for high risk areas. Not everyone needs insurance for home flooding. If you have a loan on your home and it is in a floodplain, then the lender is likely to require you to purchase flood insurance for at least the amount of your loan. Buying insurance for home flooding is a good idea if you live in an area prone to floods. Your insurance agent can determine that for you by looking up your address. If you have received government assistance during a previous flood then you may be required to carry flood insurance as a condition of receiving that money.
Renters can also buy flood insurance administered by the same program. This type of insurance covers the contents of the home instead of the structure itself. Some landlords may require you to purchase flood insurance as part of the rental agreement.
Buying flood insurance if you need it will certainly add to your overall homeowners insurance premiums. But when the heavy rains come you will know that, if the worst happens, you are covered.