What is Flood Insurance?
It is a kind of coverage that protects homeowners from financial loss after a flood. Its rules, costs, and exclusions differ from those in the regular homeowner’s or renter’s insurance. Your home insurance does not cover flood damage.
Who Needs it?
Mortgage borrowers living in high-risk places must buy flood coverage. If you own a business or live in a high-risk location, you need it. Tenants, homeowners and business owners need it.
How Does it Work?
After you fill out an application and make payment, the insurer processes your policy. Typically, there is a one month waiting period. The maximum insurance available for your home is 250,000 dollars. For personal items, the limit is 100,000 dollars. If flooding occurs, you are eligible for compensation. Your agent can help with the claim process.
Types of Coverage
Two types exist:
The policy covers items that are part and parcel of the physical structure. It includes walls, roofs, floors, furnace, and insulation among others.
You can buy this policy voluntarily. Lenders do not require it to process your mortgage loan. But you want peace of mind, right? The cover ensures that your valuable belongings remain safe.
Since the federal government backs the NFIP, your compensation is guaranteed. The cover is affordable. You can also request partial payment for quicker recovery. And you can expect reimbursement even if the president has not declared a federal disaster.
Misfortune could strike when you least expect it. You should ensure you have adequate cover in case of a catastrophe such as a flood. It makes sense to have enough flood coverage even when your mortgage lender does not require you to have it. You need to stay safe from potential financial loss.