Is flood insurance right for you?

Flooded neighborhood street

Flooding is the most common natural disaster in the United States. Excessive water buildup caused by storms, changes to creeks, river and stream overflows due to blockages and snowmelt, are some of the most common causes of flooding.

If you live in a flood zone, buying flood insurance may be mandatory. But even if you don’t live in a coastal region or other flood-prone zone, you could face damage or other related expenses from rising water not covered by most standard homeowners insurance policies. That’s why having flood insurance could make sense for anyone.

No home is completely safe from flooding

More than 20 percent of flood claims come from properties outside areas generally considered to be more vulnerable to flooding, such as homes near the coast or inland homes near smaller bodies of water that could rise excessively.

Just one inch of water in a home can cause more than $25,000 in damages. If your property is not protected by flood insurance, you’ll be stuck paying for the cost of all repairs out of pocket. This could cause a serious financial burden if you haven’t planned to pay for such emergency repairs.

Flood insurance offers protection for the insured building, the building’s foundation, electrical and plumbing systems, refrigerators, stoves and appliances, floors, furniture, clothes, and valuables like artwork and jewelry. You can purchase additional coverage to provide for living expenses and any damage to finished basements.

Where do I buy flood insurance?

If you’re looking for optional protection from flooding, the first thing you’ll want to do is call your homeowners insurance agent. However, if they’re not licensed to sell flood insurance, you have another option. The National Flood Insurance Program (NFIP), managed by the Federal Emergency Management Agency (FEMA), may be able to help.

You cannot buy FEMA flood insurance directly through the federal government. If your current homeowners insurance agent or company doesn’t sell flood insurance, you can call the NFIP Help Center at 800.427.4661 to request a referral to one that does.

Not everyone is eligible to purchase a NFIP policy. It can be sold only to individuals who live in FEMA-approved participating communities. The good news is many North Carolina communities participate.

A participating Program Community is typically an individual city, town or village, but could be an entire county that has applied and is accepted by FEMA. For example, at least one municipality in every county is on FEMA’s list of communities participating in the National Flood Program. This means anyone who resides within the city, town or village limits is eligible to purchase flood insurance through NFIP.

How much does NFIP flood insurance cost?

NFIP policy costs are determined based on factors such as:

  • Year of construction
  • Building occupancy
  • Number of floors
  • Location of contents
  • Flood risk (e.g. type of flood zone — low, moderate, high)
  • Location of lowest floor in relation to the Base Flood Elevation (the computed elevation to which floodwater is anticipated to rise during a base flood) on the flood map
  • Deductible and amount of building and contents coverage

Should I shop around?

Flood insurance is the only type of policy where costs don’t differ from one insurer to the next. Therefore, the cost you’re quoted by one agent will be the same across the board with all other agents.

In case of excessive water in your home, flood insurance could be exactly what you need in order to prevent financial burdens. Contact your insurance carrier to learn more about a flood insurance policy.

The advice provided is for informational purposes only.

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