Flood insurance is usually the last thing most people think about when they buy a home. But, yet, it’s critical coverage depending on where you live. Most people are drawn to live near water. It’s beautiful and peaceful, and it sustains life. However, flooding causes billions of dollars in damage every year. Some lenders require you to buy flood insurance. However, even if you own your home without debt, it may be wise to consider it.
Does homeowners insurance cover floods?
Many people do not know what their homeowners insurance covers but usually assume it covers every peril. Typically, homeowners insurance covers these perils:
- Smoke or fire
- Wind (high winds and tornadoes; not windstorms like hurricanes)
- Snow or ice volume
- Falling trees or objects
- Faulty appliances or pipes
- Civil disturbances or riots
Unfortunately, thousands of people find out the hard way that their homeowners policy does not cover floods when they receive a claim denial.
How does flood insurance work?
Flood insurance protects your home’s structure and its contents. For example, the policy would cover if a flood ruined your electrical and plumbing systems, HVAC unit, cabinets, furniture, and other personal belongings. Flood insurance is unique because FEMA, a government agency, administers the National Flood Insurance Program. They maintain flood risk maps that identify areas around the country at the highest risk for flood damage.
Because it’s highly regulated, flood insurance rates are identical regardless of where you get it.
How to determine if you need flood insurance
Some property owners, such as those in high-risk flooding areas, may be required to buy flood insurance. Specifically, suppose you received federal disaster assistance in the past. In that case, the government requires you to have a flood insurance policy to stay eligible for financial help in the future. Additionally, if you have a government-backed loan, the terms will require you to have flood insurance. On the other hand, private mortgage lenders choose whether to require buying a flood insurance policy.
How to buy flood insurance
The NFIP cooperates with over 50 insurance providers and thousands of independent insurance agents around the country to provide matching NFIP rates and coverage. Winstead Insurance in Elkton, MD can help you get a flood insurance policy to cover your house.
What other information should I know about flood insurance?
Flood insurance deductibles can range from $1,000 to $10,000, and covers a maximum of $250,000 building and $100,000 contents damage. You can also buy flood insurance to cover your personal belongings if you’re renting. Also, flood insurance pays claims regardless of whether a disaster is declared. If there is a disaster, you can still receive FEMA assistance as a loan or grant in addition to a flood insurance claim.
Don’t let the risk of flood stress you. Winstead Insurance will help you find affordable flood insurance rates and answer any questions about how coverage works. Call our team at 410.398.6700 or text 410.398.6700 today.