Flood Insurance Advice

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A common misconception regarding homeowner’s insurance is that the policy coverage includes flood damage. However, this is not always the case. A homeowner should check the requirements of carrying flood insurance with their lender or bank, as this type of coverage is not always required. History of flooding and input from their broker are also good things to take into account.

Flooding insurance only covers natural disasters such as hurricanes, earthquakes, flash flooding and landslides. One has to be eligible before taking a flooding policy out they first need to check their topography as well as the community history. National flood insurance was created by the federal Emergency Management Administration due to predictability of flood risks in certain areas.

Due to the high claim rate on flood insurance policies it is not possible for insurance companies to provide flood insurance due to the elimination of profit opportunities for the company. There are special requirements needed by the NFIP before a homeowner can qualify for a flooding insurance policy. The voluntary participation of a community is designed to help reduce any future flood damage which may occur.

In these communities, there are select insurance companies that participate with the NFIP program. Only homeowners, renters and business owners are eligible to purchase a flooding insurance policy. If direct coverage is needed, typically as a last resort, it is available through the NFIP. The necessity for flood insurance in an area is determined by the community, the topography and the surrounding area. Often, homeowners remain unaware that they are in fact eligible for NFIP.

For those that have purchased a property in a flood zone are required by the Federal Government to purchase flood insurance only when they are backed by federal loans such as FHA and VA loans. For these specific areas the private lender also requires that one takes out coverage. However homeowners that live in a low flood risk area have an option of taking out a flood insurance policy. All they need do is some research on the surrounding properties as well as the topography and then make a decision as to whether they require insurance against flooding or not.

Homeowners have several ways to get the information they need on their community. The first place they can go is to their insurance agent for advice on whether they should carry flooding insurance. The agent bases their advice on local claim activity.

Homeowners can also get information on their area’s flooding patterns and topography from their local building and land management departments, as these officials are well-versed in the severity of flooding issues from melt-offs and storms. Finally, a homeowner can also speak to their neighbors for some good advice on what decision to make based on their experience with flooding in the area.

For instance homeowners living in Florida need to be aware and become familiar with hurricane coverage. Each state has its own requirements with regards to a homeowner’s insurance policy. For instance Florida is well known for its hurricanes and earthquakes.

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