Flood Insurance Explained
Those who have been victimized by severe flooding can attest to the devastation that is one can be left with in the aftermath of such a tragedy. This devastation will often include homes, businesses and all that lies within. If you happen to reside in a zone that is designated as high risk for flooding, it is vital to obtain good flood insurance.
What is it?
This coverage is available for those who own homes and condos, renters, commercial renters and businesses. It protects the structure and the personal contents that lie within. Keep in mind that there will be various items excluded from coverage and you are well served in reviewing all this with insurance professional. Protection for basements, for instance, can be limited along with any edifices outside of the main structure like swimming pools, sheds and so on. These things would often need to be specifically covered as policy add-ons.
This coverage is tailor made for those who reside in flood zones or areas where the likelihood of damage from mudslides, broken water mains, and severe storms is high. This insurance is specifically engineered to cover for such perils. Generally, these types of policies are divided into two designations, moderate-to-low risk and high risk categories. People who live in the moderate-to-low risk zones can purchases this coverage for a relatively low price. High-risk areas are covered more comprehensively and include more on the inside and more protection the buildings themselves at a higher purchase price.
How it is priced
Insurance premiums are determined by several things, including the year the building was put up and whether it is located in a flood zone. Other determining factors include the number of stories and where the contents covered, etc. Your premium is also determined by the level of coverage you choose and how large the deductible will be. If you carry a mortgage and also reside in a high-risk flood area, lenders will also mandate that you obtain this insurance coverage to protect their investment as well.
The government provides coverage from FEMA, which is the national flood insurance provider. Also, several private companies also provide this coverage. The law mandates that private insurance agents be members of the National Flood Insurance Program (NFIP) in order to offer this specialized coverage. This agency serves to provide financial help to those who are the victims of flood damage.
A big plus in having this coverage is the knowledge that should a flood disaster strikes, you are not left helpless. This protection keeps the policyholder from suffering the consequences of extreme financial loss due to a flooding disaster.