Flood Insurance


What To Know About Flood Insurance

Flood insurance for homes is always purchased through the National Flood Insurance Program (NFIP) that is administered by the Federal Emergency Management Agency (FEMA). Most insurance agents can sell flood insurance through this program. FEMA has developed a national flood zone map that determines how likely a home is to experience a flood. Mortgage companies require homes in certain flood zones to have flood insurance. Mortgage companies require that flood insurance policies have building coverage. It is optional to also have contents insured. The building and contents are separately insured, each with a deductible. The cost of a flood insurance policy doesn’t differ between agents as it is determined by NFIP. How much a policy cost depends on several factors. These include what year the house was built, its number of floors, on what floor contents are located, the flood zone the home is located in, the deductible, and the amount of building and contents coverage. With a few exceptions, there is a 30 day waiting period between when a flood policy is purchased and when it goes into effect. The building coverage includes the home and its foundation. It also includes permanent parts of the home such as electrical and plumbing systems, furnaces and central air units, a detached garage, and cabinets. It covers primary residences on a replacement cost basis, in other words, how much it costs to repair the damage in today’s dollars. If it’s a vacation home then it is only insured on an actual cash value basis which means the depreciation is taken into account. The contents coverage covers all of your belongings like kitchen appliances, furniture, clothes, and electronics. Contents are only covered on an actual cash value basis. Some things are not covered by flood insurance. Among these are outdoor structures such as decks and fences. It doesn’t cover the expense of temporary housing while your home is being repaired. It also won’t cover water or mold damage if these could have been avoided by the owner of the property.