First of all, lets understand that flood insurance provides coverage for rising waters, like from heavy rains or the ocean (hurricane surge) or river waters overflowing their banks. Flood insurance is almost always written under a separate policy. Flood insurance is not provided by the typical homeowners policy which does cover water damage from a broken pipe, leaky water heater, etc. in the home.
As you consider whether to buy flood insurance, one fact to remember is that one inch of water in your home will cause about $25,000 worth of damage – a surprising figure but that is what the data shows.
Recently, FEMA released rates for the National Flood Insurance Program’s new Equity in Action, or Risk Rating 2.0, methodology. This new rating approach is based on a promise of fairness to all home owners. Rates are no longer based on flood zones or base flood elevation, but rather look at the specific characteristics of individual properties. Rating factors include distance to water, the type of water source, replacement cost of the home, whether built on a slab or elevated, number of prior claims, etc. All this helps to determine a property’s unique and true flood risk.
The real good news is that flood insurance agents can more easily rate flood policies – no elevation certificate is needed. Thus, you the home owners can quickly find out the cost of flood insurance on your home.
Only you can answer the question about whether you need flood insurance on your home. Having all the pertinent facts is important, so contact your agent and get a flood policy premium quotation.
