Flood InsuranceHomeowners and renters insurance does not typically cover flood damage.1 More than 20 percent of flood claims come from properties outside high-risk flood zones.2 You should also know that flood damage is specifically excluded from all basic homeowner's policies. Fortunately, you can purchase a separate Federal Flood Insurance policy through one of many private insurance companies that write and service the policies for the government. Flooding is the temporary inundation of normally dry land caused by the overflow of inland or tidal waters, the unusual or rapid accumulation or runoff of surface waters, or mudslides caused by flooding. Floods can result from storms, hurricanes, melting snow, dam or levee failure, or even inadequate drainage. According to the National Flood Insurance Program (NFIP), a wet situation is considered a flood if two adjacent properties are under water. In rural areas, at least two acres must be submerged. Communities Get with the Program Your premium will depend on the level of risk associated with the location of your home. New flood maps utilize the following categories of Special Flood Hazard Areas or SFHAs:
Homeowners in a low- to moderate-risk zone may be eligible for a discounted preferred risk policy. And flood insurance should cost the same whether you buy it from an insurance agent or directly from the NFIP. Types of Coverage A "dwelling" policy covers single family and multi-family homes. Apartments and businesses require a "general property" policy. Condominium owners can purchase a "residential condominium building association policy." Expect a standard 30-day waiting period for new policies, which means they must be purchased well before any flood warnings sound. No matter where you live or work, some risk of flooding exists.4 Could a flood ruin you? That's the $250,000 question to answer when deciding whether you need flood insurance. Sources: 1 – 4) National Flood Insurance Program, 2019
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