Understanding Flood Protection Insurance
for your home
It is so peaceful to lie in bed and listen to the raindrops fall
softly against your window as you drift off to sleep. What's
not so serene is when that rain turns into a flood that
damages your home, leaving you left to pick up the soggy
pieces because, unfortunately, standard homeowners
insurance typically doesn't cover flood damage, even in
areas most prone to flooding and water damage.
So how do you protect yourself for the day when a flood
strikes? The National Flood Insurance Program suggests options. The price of flood insurance differs depending on your location and your property's risk. In high-risk areas, coverage is often mandatory, but most areas in the United States are at moderate to low risk for flooding. Here are some things you should know about insurance in your area:
• Moderate to low-risk areas: Although flood insurance isn't required by law in some jurisdictions, any area is susceptible to flood damage. A Preferred Risk Policy covers both a building and its contents. A contents-only version is also available. Preferred risk premiums are the lowest available through the NFIP. These policies potentially could cover up to $100,000 for houses.
• High-risk areas: A number of factors determine insurance rates in high-risk areas, including year of home construction, occupancy, number of floors, location of contents, flood zone and elevation. A standard-rated policy is often the only option in high-risk areas and offers separate building and contents coverage.