Flood Insurance Quotes & Coverages
While you may think your home will never flood, there is a good chance you are wrong. According to FEMA, roughly 99% of counties in the United States were hit by flooding issues between 1996 and 2019. Florida is on the top of the list for flood insured homes, get Florida flood insurance quotes today!
Flooding can happen just about anywhere if the conditions are right and the damage it causes can be tremendous. According to statistics from National Flood Insurance Program (NFIP), the average payout on a flood claim in 2019 was a budget busting $52,000. If you are not carrying the proper flood insurance, the cost to repair your home will fall to you.
A standard homeowners policy excludes flood damage so if you are not carrying flood insurance you will be responsible for all expenses related to the flood damage. Currently, only 15 percent of homeowners carry flood insurance.
Keep reading to learn everything you need to know about flood insurance.
Do I need flood insurance?
In most cases, that decision is up to you. However, if you live in a high-risk flood area and have a government backed mortgage, your lender will require that you carry a flood insurance policy to help protect their investment in your home.
Even if you are not in a high-risk area you may want to consider adding flood coverage. According to NFIP data, properties that fall into the medium and even low risk categories end up filing more than 20percent of NFIP claims and receive one-third of federal Disaster Assistance for flooding.
While flood insurance can be expensive, it can be a financial lifesaver if your home is severely damaged or destroyed by a flood. Unless you can easily afford to rebuild your home and replace most of your possessions if they are destroyed in a flood, you should consider a flood insurance policy.
What about federal disaster aid?
While federal disaster aid may step up to help after a major storm, if you don’t have flood insurance your only option will be a loan from the Disaster Loan Program of the Small Business Administration (SBA).
SBA loans can be approved up to $200,000 for homeowners to repair their primary residences after flooding or storm damage. Homeowners and renters can also receive up to $40,000 to repair or replace your personal property. With an SBA loan you will have to pay the loan back, but they do come with a low interest rate and long repayment terms.
In the end, a flood insurance premium will almost always cost less than having to take out an SBA loan to repair your home after a disaster. Federal disaster aid is designed as a last resort for homeowners not carrying insurance.
Where can I buy flood insurance?
There are two ways to purchase flood insurance, from the National Flood Insurance Program (NFIP) or from a private insurance company. There are advantages and disadvantages to both. Here is a quick rundown of each:
National Flood Insurance Program (NFIP): In some areas, your only choice may be a NFIP policy as private insurers no longer write policies in the area. The NFIP is required to accept all applicants that live in communities that participate in the NFIP.
NFIP policies are backed by the federal government but they provide pretty basic flood insurance. NFIP policies are sold by regular insurance companies such as State Farm and Allstate, you cannot purchase a policy directly from the NFIP or FEMA.
One of the bigger issues with a NFIP policy is that it comes with much lower coverage limits: NFIP policy limits:
- Max dwelling coverage - $250,000: This is the max dwelling coverage that a NFIP policy will offer. If this is not enough coverage for your home, you may need to purchase supplemental coverage in the private market.
- Max contents coverage - $100,000: NFIP policies limit coverage for your personal possessions to $100,000.
In addition to lower coverage levels, NFIP policies also exclude loss of use coverage which will help cover living expenses if you are unable to live in your home while it is being repaired due to flood damage. This coverage typically covers costs such as hotel and restaurant bills, pet boarding and even dry cleaning.
NFIP policies come with a 30-day waiting period before coverage kicks in so don’t wait until a storm is on the way before purchasing coverage. There are a few exceptions to the 30-day waiting period:
- If you purchase an NFIP plan in relation to making, extending, renewing, or increasing a mortgage loan.
- If you’re increasing coverage at your NFIP policy renewal time.
- The waiting period may be waived if your property is affected by flooding on burned federal land and your plan is purchased within 60 days of the fire-containment date.
- There is a one-day waiting period if your building is newly designated in a high-risk Special Flood Hazard Area and you purchase an NFIP plan within the 13-month period after a map revision.
Private flood insurance: Private flood insurance is available from many insurers but not all major insurance companies offer flood coverage. In general, private flood policies have higher coverage levels and often offer additional coverages such as loss of use.
- Max dwelling coverage – Up to $5 million or higher: Private flood insurance policies have much higher coverage limits. Depending on your property you can often find coverage limits up to $5 million or even higher.
- Max contents coverage - $250,000: Again, coverage limits for your contents coverage will be much higher with a private flood insurance policy.
In addition to higher coverage levels, private flood insurance policies often include loss of use coverage. Private policies may come with a 30-day waiting period or they may go into effect immediately depending on the insurer.
Replacement value or actual cash value with flood insurance
FEMA flood insurance and some private flood insurance policies often offer policies in replacement cost or actual cash value. Here is a breakdown of the differences:
- Replacement value: A replacement value policy will repair or replace your home and contents with brand new items of similar quality, regardless how old your destroyed items were.
- Actual cash value: Actual cash value takes depreciation into account when valuing your property and contents. This means that if your roof is currently 15 years old, your insurance will pay out what your roof is worth today, not what it will cost to replace it.
When it comes to the contents of your home, with an actual cash value policy your 10-year-old TV will be almost worthless according to your insurance company if you have to make a claim. In most cases, the payout you receive from an actual cash value policy will not be enough to replace your items as their value has depreciated over the years, leaving you to cover the balance out of pocket.
Unfortunately, a NFIP policy will only cover your contents at actual cash value. Private flood insurance policies may offer replacement value coverage, but it can vary by insurer.
What is excluded from flood insurance?
NFIP flood insurance policies don’t provide coverage for the following:
- Damage caused by earth moving
- Additional living expenses
- Walls and decks
- Swimming pools
- Currency or valuable papers
Private flood policies may cover these items, but coverage can vary by insurer.
Does flood insurance cover damage in the basement?
Most flood insurance policies limit coverage in the basement to certain items that are necessary to run the home such water heaters, furnaces, washers, and dryers.
Carpeting, wall coverings and all personal property is excluded from coverage. This can vary with private flood policies so be sure to ask about the details of basement coverage.
How much does Flood Insurance Cost?
Flood insurance can be expensive, particularly if you live on the coast or oceanfront, however it is almost always cheaper than the cost to rebuild your home and replace your possessions. According to NFIP data, the average flood insurance premium is roughly $700.
Flood insurance rates can vary dramatically so it is always a good idea to shop both a NFIP policy as well as private market policies to compare rates and coverage levels.
Ready to buy a flood insurance policy?
If you are ready to protect your home with a flood insurance policy, we can help. Give us a call or start a quote online.
Call Direct to Speak with a Flood Insurance Agent: 888-620-1954
Customers can get quotes in 3 easy steps:
- Property Address
- Details about the property (year built, square footage, construction type, foundation, does it have a basement, is the home owned, primary residence, elevation cerficate)
- Set the level of coverage needed (building coverage, contents coverage, set deductible)
Customers can speak with a licensed flood insurance agent, get multiple quotes, easy to review price and coverage options online, by email and over the phone.