We all know that homeowners insurance doesn’t provide coverage for damages due to floods. If you’re living in a flood-prone zone, you need to; actually must have separate flood insurance policy to protect your home from the damages. But how much are the premiums going to cost you?
The federal government offers coverage against floods through the National Flood Insurance Program at an average cost of about $700 annually. But premiums do vary as per your locality and property’s flood risks.
If the risks that your home is exposed to are low, with a maximum coverage of $250,000 for the dwelling and $100,000 for possessions the premiums will come down to somewhere $405 per year, or $452 if there is a basement in your home. Apart from just the premiums, you’ll also have to pay a new surcharge of $25 if it’s a primary residence, and $250 if it’s a second home or you’re renting it. In a higher-risk area, a similar coverage can cost you more than $2,500.
Significantly, you can look up for the risk proposition for your home and get quotes by visiting FloodSmart.gov. The mortgage lender might ask you for a flood insurance if you’re living in a high-risk zone. However, even if your lender doesn’t ask for it, it could still be a valuable investment. From 2008 to 2012, the average residential flood claim was more than $38,000. Your homeowners insurance would probably cover the damages caused by stuff that come from the top down - like rain and wind - but it doesn’t cover for floods.
"The average cost of a policy is about $700 a year, but premiums vary depending on your property's flood risk."
Get in touch with your homeowners insurance agent as see if he/she sells federal flood insurance policies separately. Some insurers like Chubb and Fireman's Fund allow you to get top up coverage after the federal plan’s limits. Else, you can also find a local agent at FloodSmart.gov who will be able to help you with the details.
Again, the website is so advanced that it can show you how much flood damage is likely to cost you (based on the number of inches of flooding and the size of your home, with a breakdown of the types of items that would be damaged during a flood of that level). For example, the tool calculates that a 5-inch flood in a 2,000 ft2 home could result in $33,870 in damages. There is also a button placed nearby that could help you reach out to an agent.
Now it’s time to go for the coverage. It’s significant to get the coverage sooner as there is a 30-day waiting period before coverage kicks in.Blog Category