Whether or not your property is in a flood zone, flooding is a considerable risk, and the repair costs are often relatively high. You can check your home’s flood risk on FEMA’s map here. Even people outside of flood zones file 20% of the insurance claims. One inch of water can cost a homeowner $25,000. That’s why flood insurance is worth considering.
It’s a legal requirement
The National Flood Insurance Program requires homeowners in high-risk zones to carry this coverage, as do mortgage lenders who offer federally backed loans. Additionally, anyone who has received federal disaster assistance for previous flood damage must buy the policy to be eligible for future aid. A lender typically includes the premium in a borrower’s monthly mortgage payment and holds it in an escrow account, like property taxes and homeowners insurance. But the flood insurance in Tennessee policy can also be purchased from private insurers offering lower rates. In addition, homeowners can mitigate the cost of their policy by reducing their home’s risk of flooding. This could mean filling in a basement or a crawl space, moving utilities out of a basement, or elevating equipment and machinery. Communities can also work together to reduce their flood risk and get designated into lower-risk zones, which may help with insurance costs. Lastly, homeowners can consider purchasing an excess flood policy to protect the maximums offered by NFIP policies. The government backs this policy, but private insurance companies administer it.
It’s a wise investment
Investing in flood insurance is brilliant because it protects against costly damage. Flooding repairs are often expensive, and they can drain your savings quickly. The average paid loss from a 2018 flood event was $42,580, enough to buy an entire house in some areas of the country. With flooding increasing in frequency due to climate change, it’s a good idea to consider purchasing a flood insurance policy. Even homes not in a flood zone can benefit from a flood insurance policy. FEMA’s flood maps don’t consider potential risks such as sewer problems or nearby construction that can increase the likelihood of flooding. In addition, many flood insurance policies offered by private insurers can be augmented with “excess” coverage that provides additional protection beyond what is covered by standard or admitted insurance companies. If you’re interested in buying a home in an area at risk for floods, it’s essential to factor in the cost of flood insurance. Depending on the size of your home and the value of your possessions, you may need to purchase more than the minimum amount of building coverage available through the NFIP.
It’s a wise insurance policy
The recent storm-related flooding serves as a reminder that flood insurance is one of the most critical policies a homeowner can buy. It’s not only required by many mortgage lenders if you live in a high-risk flood zone, but it is also essential for protecting your valuable assets. Flood insurance, a separate policy from standard homeowners’ insurance, is backed by the federal government through the National Flood Insurance Program (NFIP) and sold by private insurers. While many people assume that only homes in high-risk flood zones need to get it, it’s important to remember that you can experience a flood anywhere.
Additionally, because climate change is making hurricanes more prominent and frequent, even homes in lower-risk areas may need to consider it. Finally, be sure to check your home’s flood risk regularly. Changes in weather patterns and local dam improvements can change your home’s NFIP flood zone status. If you need help understanding your flood risk, a policy calculator is an excellent place to start.
It’s a wise financial decision
Flooding is one of the most common natural disasters in the United States. It can occur in every region and is more than just a weather event – it can cost people their lives. It can also cost a lot of money to repair and rebuild. Flood insurance provides financial assistance for homeowners who experience a loss due to flooding. Homeowners in areas prone to flooding may be required to buy flood insurance from their mortgage lender. This is especially true if they have a federally regulated or FHA mortgage.
Additionally, flood insurance is often required for those receiving government disaster relief. While some people may think they don’t need flood insurance, that’s a big mistake. Standard homeowners’ or renter’s policies do not cover flood damage. Water that enters a home from above is considered a flood and can only be covered by a comprehensive flood policy. If you need help determining whether your property is in an area prone to flooding, check out the FEMA maps. You can also have a survey to find out more about your property
