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Flood Insurance

One of the most valuable assets that you will ever know is your home. Because of this, it is very important that you make sure that your home is properly covered by insurance at all times. One very important type of insurance that you need to have in your home is flood insurance.

What Does Flood Damage Insurance Cover?

The risk of a flood is a very serious concern for people in many areas of the country. In areas that are located near ocean waters, rivers, and other bodies of water, flood conditions can occur on a regular basis. In most of these situations, a basic home insurance policy will not cover damage to a home that is affected by a flood. Instead, you will need to have an additional flood policy in place as it will provide you with coverage for damage that was caused by the flood.

When is it Needed?

Insurance for flood damage requirements are often dictated by a lender and based on where you live. FEMA is a national program that has created and updated a flood zone map. Those that live in an area that is considered a high-risk flood zone will be required by their mortgage lenders to carry flooding insurance as long as their loan is outstanding. In most situations, the lender will require that you escrow your flood insurance payments each month to make sure that the water damage insurance coverage does not lapse.

How are Costs Determined?

Depending on where you live, the cost of this insurance can be expensive. Flood damage insurance rates are determined by a variety of factors. The most important factor is where your home is located. If you are considered to be in a very high-risk zone, your monthly premiums will be higher than someone that lives in a low-risk zone. Another factor that will influence your insurance costs is the replacement value of your home. If your property will be very expensive to replace, it will cost a lot more money to insure through a new insurance policy than a home that is less expensive for someone to replace.