How do I know I’m getting the best deal on flood insurance?

water coming in to basement

What is flood insurance?

One thing that every homeowners knows they need is homeowner’s insurance. What is included in that insurance can depend on many factors. The things that are typically covered are fire, injury, roof damage, storm damage, and wind damage. What isn’t always covered is flood insurance. Claim assistance is available with most major insurance companies, and that is when you find out if you have flood insurance – or don’t. 

In the United States, natural disasters result in flooding 90% of the time, typically in low lying areas. What many homeowners and renters do not realize, their policy does not have flood insurance specifically. So, any damages and losses from a flood are not covered. 

The majority of flood insurance is obtained through Federal Emergency Management Agency, commonly referred to as FEMA through an insurer.  Flood insurance coverage is for direct physical losses from a flood and losses from flood related destruction caused by currents or waves of water that has exceeded cyclical levels. Or destruction caused by the accompanying flash flood, severe storm, abnormal tide surge or other parallel situation that resulted in flooding.

Is all flood insurance through FEMA?

No, but it is managed and monitored by FEMA. Anyone interested in buying flood insurance should contact their insurance provider first. If they participate in the NFIP program, the flood insurance will be issued by the National Flood Insurance Program (NFIP) and managed and monitored by the Federal Emergency Management Agency (FEMA). Flood insurance is backed through this program by the federal government in effort to minimize the impact that flooding has on businesses, homes, and public structures.

Before 1968, if your business or home was damaged or devastated by flood, you were on your own to rebuild and replace because most insurance companies didn’t offer flood insurance. If a company did offer flood insurance, it was expensive and unaffordable for most. This is when the federal government stepped in to take care of the American people and created the National Flood Insurance Program. 

One goal of this program was to offer flood zone coverage that was government subsidized and making it reasonably priced for individuals. The second goal of this program was to educate communities and the residents the dangers of building in flood prone areas and to educate them to avoid possible flooding.

Not every insurer works with the NFIP program though, so your business owner, homeowners or renter’s policy may be through one company and your flood insurance through another. While that seems to be confusing, it also keeps you from having to shop around for the best rate. Why? Because the federal government through FEMA monitors the rates and there is truly little difference in premium quotes for identical policies.

Confused? Call your insurance agent for more information and inquire if the community you live participates in the NFIP offered by FEMA.  Once you have this policy I place, there are numbers you’ll be given in case you need flood insurance claim assistance.

What is not covered under flood insurance?

It will depend which of the types of flood insurance you purchase through the National Flood Insurance Program, where there are two type of flood insurance coverage offered: 

  1. Building Property: This is required for homes that are in located in a flood zone and coverage is for the dwelling only up to $250,000.  
  2. Personal Property: This coverage is recommended, but not required even in flood zones, and provides coverage for contents of your dwelling up to $100,000. 

Flood insurance is expensive, as much as $700 a year according to FEMA and for homes in flood zones, the premiums can be as much as $2,000. On a good note, the federal government subsidizes some of that amount and as with any insurance plan, the deductible you choose will determine the premium amount, and don’t forget there is a thirty-day waiting period before your flood insurance goes into effect. If you are in the need to file a claim, there is flood insurance claim assistance available to walk you through the process.

Once you have flood insurance policy, don’t breathe relief until after you have filed a claim.  Flood insurance claim denial or underpayment are always possible, like any insurance policy. Being backed by the federal government helps with the premiums but doesn’t guarantee claim payment. 

The following are typical reasons a flood claim is denied, which can be explained in more detail by flood insurance claim assistance representative of NFIP or FEMA: 

  • The 30-day waiting period is still in effect
  • Proof of loss deadline to file has expired
  • Movement of the earth caused the flood
  • Adjuster deemed there was pre-existing damage
  • Your basement is covered in your flood policy 

Who can buy flood insurance?

Anyone can purchase flood insurance if they are in a community that participate in the Federal Emergency Management Agency’s program, NFIPA.  To purchase a new flood insurance policy, call your current insurance company or an independent agent in your area that participates with the NFIP.

How can I avoid paying flood insurance?

You can purchase an elevation certificate; some insurance companies will require one if you’re requesting to drop your flood insurance. This certificate shows that your building or home is at an elevation compared to the estimated floodwater height that could be reached in a major flood for structures in a high-risk flood zone.

slab water leaking through

Will FEMA help with no flood insurance?

If you are in a disaster area that has been federally recognized as such, you may quality for a an IHP grant. disaster area in order to qualify for a FEMA grant, IHP, (Individuals and Households Program). This program provides relief for those without flood insurance, and to assistance for those with flood insurance in paying for expenses that are disaster-related but not covered by their flood insurance policy. A representative of NFIP can provide you flood insurance claim assistance to get as much help as possible.

Do you need flood insurance?  Talk to your insurance agent. If your community doesn’t participate in the NFIP by FEMA, there is a good chance that is felt there isn’t a need for it. If you’re not near a large body of water or in a low-lying area, flood insurance may not be needed. Your insurance agent should be able to provide you answers and information. For help with flood insurance claims, call 833-312-5246 today.