What do you need to know about flood insurance to make sure you are fully protected in the case of an incident?
Below are the top 11 questions to ask your agent when finding the right flood policy for you.
Let’s get the first question out of the way…
1. Do I need flood insurance?
The answer is almost always yes. Flood insurance generally isn’t legally required unless you have a federally-backed mortgage in a high-risk flood zone. Some mortgage lenders will also require flood insurance as a stipulation of the loan.
Even if it isn’t mandatory, though, flood insurance is highly recommended. Everyone is at risk for flooding, even if you don’t live near a body of water. Flood is one of the most common types of natural disasters. Hurricanes, snow, rain, bodies of water, and even burst communal pipes can cause flooding in your home. Even a few inches of water can cause thousands of dollars in damage to your property and home structure.
We recommend that everyone consider flood insurance, which can help ensure you’re not stuck in a financial crisis if flooding were to occur.
Keep in mind also that FEMA does not always cover flooding. In fact, the government will only step in with relief if the President declares it a state of emergency or federal disaster. 90% of natural disasters are not an emergency and therefore not covered by FEMA. Even when the government steps in to assist, aid usually comes in the form of a loan that needs to be paid back.
2. Does my homeowners insurance cover flood?
Another reason you need flood insurance is because your homeowners insurance likely doesn’t cover flood. Some insurance companies will include a flood clause in your homeowners policy, but it’s usually not as comprehensive as specific flood coverage. Make sure you ask your agent if you need a separate policy for flood.
3. Do I need flood insurance if I’m a renter?
If you rent your home, any flood damage to the structure of the house would likely fall under your landlord’s insurance. They own the physical structure, so any flood damage would be their responsibility.
But their insurance would likely not cover your personal property. That means that any damage done to the interior items that you own would fall under your own flood insurance.
So, even if you’re renting, it’s important to get comprehensive flood insurance to protect your belongings. Plus, if you needed to vacate the property due to water damage or repairs, your flood insurance could help pay for alternative accommodations in the meantime.
4. Do I live in a high-risk flood zone?
We recommend flood insurance for all homeowners, regardless of the risk zone. Nevertheless, it’s important for you to know your home’s flood risk so you can find the right coverage at the right price.
There are designated “high risk flood zones,” which are deemed Special Flood Hazard Areas. Oftentimes, mortgage lenders require flood insurance in these areas.
You can find out the risk zone of your home by looking at FEMA maps or calling your town. Each municipality holds elevation certificates specific to the town, so you can pull the map associated to your home. You’ll likely need to give these documents to your insurance broker to make sure you have the appropriate flood coverage.
5. What are my coverage options?
There are two types of flood coverage: one that covers the structure of the house and one that covers your personal property. In most cases, you’ll want to purchase both types of insurance. If you get just the basic structure flood insurance, any of your belongings that are damaged in the flood won’t be covered—including furniture, carpeting, clothing, and electronics.
Make sure you talk to your insurance agent about specifying that you want to cover both structure and personal property for optimal coverage.
6. What does my flood insurance actually cover?
The types of flooding disasters that your insurance covers will vary depending on the agency. Some insurers might cover frozen pipes that burst in your home, while others won’t. Some will include hurricane flooding, while others put this in a separate category.
Build a relationship with your insurance agent and go through each individual scenario where you would and would not be covered in the case of an incident.
7. What areas of the home will my flood insurance cover?
Flood insurance is typically calculated based on your home’s lowest elevation point (where the foundation of the home is). This means that any rooms or structures below that point might not be covered, like basements or crawl spaces.
You’ll also want to inquire if your flood insurance will cover temporary accommodations if you’re forced to vacate your home due to damage.
Areas of coverage vary highly depending on the insurance company, so make sure you ask an agent which rooms and areas of your property are specifically covered. Keep in mind that the lowest rooms, like the basement, tend to flood first—so you want to make sure these have full protection.
8. What is my home’s lowest point?
When insurance companies are calculating rates, they look to the lowest point of elevation. If your generator, A/C, or garages are set lower than the home’s foundation, these units might be considered the “lowest point”—even if they’re not part of your home. The lower the elevation, the higher the premium.
You want to make sure that you understand where your estimate is coming from so you can make adjustments as necessary. Balance out areas of coverage with lowest elevation point.
9. How can I get the best rate?
Flood insurance is more affordable than most people think it is. Still, the cost is highly variable depending on your insurer, flood risk zone (higher risk means higher premiums), and your elevation levels (lower elevation means higher premiums).
Talk to an agent about where your premiums are coming from and how they relate to your coverage limits and deductibles.
From there, ask how you can get discounts to reduce this rate. For example, could you move your generator to be level with your house to raise your lowest elevation point? Will you get a discount if you implement home flood-safety features?
10. How long will it take to get flood insurance?
There is usually a 30-day waiting period for your flood insurance to take effect, especially if you’re going through the federal National Flood Insurance Program (NFIP). This waiting period helps prevent people from getting last-minute flood insurance after a flood is announced.
However, some private companies will allow a shorter waiting period of one to two weeks. If you want quick protection and peace of mind, ask your insurance agent how to speed up the process.
11. What does the claims process look like?
This is a question you should ask every insurance agent for every type of coverage, but it’s often overlooked with flood insurance. Talk to your agent about how to make a claim in the case of an incident. How do you communicate with your company? How quickly will someone come out to survey the damage? When will you start to receive money? What are the most common points of friction with the claims process?
You should never be afraid to ask these questions with your insurance agent. You want an agent who has your best interests at heart and will get you the greatest coverage at the lowest rate.