When Is Personal Flood Insurance Required?

No matter where you live, your home faces the risk of being damaged for several reasons, including natural disasters. One of the most common types of disasters are floods, which can take significant time and money to clean up. Certain areas are more prone to flooding than others, however. Consequently, personal flood insurance can be either required or optional, depending on your location and other factors. Here is a close look at this subject.

What Does Flood Insurance Cover?

Before discussing the relative necessity of personal flood insurance, it’s important to understand exactly what this type of policy covers. Most flood insurance policies include two types of coverage: building and contents coverage. The former helps pay for damages to your home’s physical structure, including walls and floors, electrical and plumbing systems, HVAC equipment, blinds, and detached garages. The latter coverage pays for damages to your possessions inside your home. This includes clothing, electronics, furniture, and portable appliances.

The National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA), provides up to $250,000 for building coverage and $100,000 for contents coverage. These are normally purchased separately, and each carries its own deductible.

What Does Flood Insurance Not Cover?

According to FEMA, flood insurance does not cover any of the following items:

• Curtains
• Portable and window air conditioners
• Portable microwaves and dishwashers
• Clothes washers and dryers
• Food freezers and the food they contain
• Carpets that are not permanently installed over unfinished floors
• Valuable items (such as artwork and furs) worth over $2,500

Additionally, cars and outdoor property such as fences, septic systems, and swimming pools.

How Does Flood Insurance Work?

Flood insurance is similar to other forms of protection. You pay an annual premium based on your home’s flood risk and the deductible you choose. If your property sustains damage due to flooding, you receive a payment equal to the sum of money needed to repair the damage, up to your policy’s limit. A flood insurance policy must be renewed annually to cover the principal balance on your mortgage loan.

Is Flood Insurance Required?

You can visit floodsmart.gov or check FEMA’s maps to see your property’s flood risk. If your home is located in a high-risk area, you will likely be obligated to purchase flood insurance. Nevertheless, you may also need flood insurance even if you live in a low-risk region. According to the NFIP, homeowners located outside high-risk flood areas accounted for one-third of the federal flood disaster assistance provided between 2014 and 2018.

Do I Need Flood Insurance?

The answer to this question largely depends on two factors: whether you have a mortgage and your history of receiving disaster-related assistance. Here is a close look at these two factors.

Do You Have A Mortgage?

If you have a government-backed mortgage and your home is located in a high-risk flood area, you need to purchase flood insurance. Depending on the lender, your lending institution may also require you to obtain flood insurance even if your home is in a low-risk area.

Have You Received Disaster Assistance?

If you reside in a high-risk flood zone and have received federal disaster aid – including FEMA grants or low-interest disaster loans from the Small Business Administration (SBA) – you are required to maintain flood insurance to qualify for future federal disaster assistance. This type of protection will ultimately give you significant peace of mind. According to FEMA, the average cost of personal flood insurance in the United States falls between $800 and $1,200 per year. There are also several additional precautions you can take to plan for floods, including preparing an emergency kit and an evacuation plan.

Get Flood Insurance From JMG

Speak to the experts at JMG Insurance Corp for more information on flood insurance and its benefits. Since our founding in 1916, we have been dedicated to serving the insurance needs of clients throughout Connecticut, New Jersey, New York, Massachusetts, and Hawaii. As an independent agency, we collaborate closely with several insurance providers that have proven their reliability over the years.

If you live in a high-risk flood area, you may be required to purchase flood insurance. Our policies include both building coverage (for your home’s walls, floors, and electrical and plumbing systems) and contents coverage (for your clothing, furniture, electronics, and more). The NFIP policy carries a 30-day waiting period for commercial flood insurance policies, although private policies typically have shorter wait times.

Call John M. Glover Insurance Agency today at (844) 304-7332 or contact us online to receive a quote or to learn more about our flood insurance policies.