Who Needs Flood Insurance?

Flooding can cause a lot of damage to your home in a very short amount of time. Does your homeowners policy already covers flood damage? Purchasing flood insurance is one of the best choices a homeowner can make to protect their financial security.

Flood insurance is not very expensive, but most Americans have yet to purchase a policy. In 2000 the average flood insurance premium was $353 per year. You can buy flood insurance in three forms: Dwelling, which covers most homes; General Property for apartments and businesses; and Residential Condominium Building Association Policies for condominium owners.

If you live in a low to moderate risk zone, a discount may be available as well.

Keep in mind that it takes 30 days for a flood insurance policy to take effect, so rushing out to buy a plan right before expected flooding is not a good idea. Be prepared ahead of time so that the flood insurance you purchase will be available when you need it.

Flood insurance operates a little differently than other policies. The federal government sets the rates, so choosing a company will depend, not on price, but on the level of service being provided. Ask questions during the decision-making process – how quickly are claims resolved? Companies that aren't doing very well don't pay out as quickly as institutions doing well in the industry.

Some companies provide insurance across the nation, but many do not. Make sure you select a company that is known for good coverage in your area.

Homeowners can insure their homes up to $250,000 and the contents for up to $100,000. Renters also receive excellent coverage, but only for personal contents, up to $100,000. Property owners have the option of insuring their buildings and the contents up to $500,000.

Flood insurance coverage is not difficult to obtain, and can be quite affordable. You will sleep easy knowing that your home and/or possessions are protected in the event of a devastating flood. Flood insurance is an investment in your peace of mind.

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