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Things You Might Not Know About Flood Insurance

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Not everyone realizes that a regular homeowner's insurance policy doesn't cover damage from flooding. For this, you need to purchase a separate flood insurance policy. These policies aren't always well understood.

Flood Insurance Isn't Only For High-Risk Areas

Actually, most homeowners have access to this type of policy. While it's a requirement to get a mortgage in high-risk areas, and sometimes in areas that are next to high-risk areas, those in low- or moderate-risk areas could also benefit from this type of coverage and won't have to pay as much as those living in high-risk areas. About 20 percent of flood insurance claims come from those living in moderate- or low-risk areas.

Not Everything Is Covered

Buying flood insurance doesn't guarantee that if your home is destroyed due to a flood, you'll get enough money back to totally replace the home. Federal flood insurance has a cap of $250,000 for the home itself and $100,000 for any belongings inside the home. To get more coverage than this, you'll need to buy excess flood insurance. Belongings stored in the basement aren't covered, and neither are any living expenses you may have while you need to stay out of your home because of flood damage. Items outside the home, such as hot tubs, cars and landscaping, aren't covered either.

Coverage Usually Doesn't Start Immediately

In most cases, you'll have to wait 30 days before your flood insurance coverage takes effect, although this isn't the case if the insurance is purchased as part of the requirements of your home loan, or if it's purchased within 13 months of the flood map being revised to put your home in a high-risk zone.

This Insurance Isn't Only for Homeowners

If you're renting a house or apartment, you can buy flood insurance that covers just your belongings. It's available in amounts up to $100,000. This is an especially good idea for anyone living in a high-risk area, but may also be useful for people living in low-to-moderate risk areas if they don't live on an upper floor.

All Insurance Agents Will Charge the Same Price

Unlike some types of insurance, there's no need to shop around for the federal flood insurance, as the government requires all insurance agents to sell it for the same price. If you want a lower-priced policy, you'll need to increase your deductible or reduce the amount of coverage. The premiums tend to be relatively low for those in low- to moderate-risk areas, with rates around $200 to $500 for a year of coverage. 

If you have more questions, get in touch with a service like Insurance Service of Sarasota.