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When Do You Have to Get Flood Insurance?

If you own a home, your bank will require a homeowners’ insurance policy. Basically, home insurance policies; do not cover every event, like a flood. For that, you will have to purchase separate flood insurance. Flood insurance is purchased through the National Flood Insurance Program and the federal government. While not everyone needs flood insurance, your bank may require it if you are located in a high-risk flood area- like flood zone AE or V.

Long Island Home Flood Insurance

Long Island Flood Insurance

You can find out if you need to purchase flood insurance by checking the Flood Insurance Rate Map. The Federal Emergency Management Agency distributes the Flood Insurance Rate Map, which is used to help determine flooding concerns for certain areas. This is the official tool that will tell you whether you are currently living in a flood zone. It’s also a good way to evaluate places you are considering moving to. Access this map by going to the FEMA website, or you can request to receive one by picking up the phone or mailing them requesting one. You can also get a copy of the Flood Insurance Study as well, which will break up the flood risk areas into two, moderate and high.

Even though you may be living in an area that is determined high risk, you are not automatically going to be required to get flood insurance. However, you may want to give it some heavy consideration. Your home is an investment; having it ruined by a flood means that your investment has essentially dropped a considerable amount in value and you would have to pay for repairs out of pocket. The price tag can be enormous. In addition, your lender may require that you have flood insurance, especially if you have taken out a loan that is backed or regulated by the U.S. government.

 What type of flood insurance policy should you take out?

There are two basic types offered: a preferred risk and a standard policy. Preferred risk policies have lower premiums, which mean less money paid by you, and is typically for areas that are deemed low or moderate risk. Standard policies are for high risk areas; these policies can cover your home and belongings. These policies will often determine your premium based on your home, its elevation, condition, year of construction, and deductible.

The federal government is the only body that can offer flood insurance, for which buyers will pay a yearly premium. The premium will be determined by the type of flood insurance policy you get and where you live. High risk policies can run in the thousands a year, while other policies can be as little as $100 a year. These premiums are paid every year and can be paid using a variety of options, including money order and cash.

When buying this insurance, know that there are policy maximums for claims. These are limits to what can be paid out for damage. As long as you are aware that there are going to be limitations to your policy, you can take precautions to make sure that your home and belongings. If you may need flood insurance, see what your options are! Contact Coastal Insurance today.

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