Wondering if you should have flood insurance or if you can even get it for your property? The Better Business Bureau of Greater Houston offers these facts that may help answer your questions.
Flood insurance comes under the National Flood Insurance Program, which is administered by the Federal Emergency Management Agency, or FEMA. Since most homeowner's insurance policies don't cover flooding, Congress created the NFIP in 1968 to help property owners protect themselves from the financial toll of a flood. NFIP doesn't actually write the policies, but can refer you to an insurance agent or company who can. According to an interactive tool on NFIP's Web site at , just two inches of water in a 2,000-square-foot home could cost $21,000 in cleanup and repairs. From 2007 to 2011, the average residential flood claim amounted to almost $30,000.
Not a homeowner but worried about flooding? Renters, condo unit owners and business owners also can buy flood insurance as long as their community participates in the NFIP. Coverage is as follows (though obviously you can't insure property for more than it's worth):
Single-family residential buildings (owners): $250,000 maximum for building;
Residential condo units (owners): $250,000 maximum; or
Contents coverage on all residential buildings (available to owners and renters): $100,000 maximum.
So, can you buy flood insurance if you live in a high-risk area? Yes, in fact if you are in a high-risk area and have a federally backed mortgage, you will be required by your lender to have flood insurance when you obtain the mortgage. If you're in a moderate- to low-risk area, you may wonder if you should bother. NFIP said almost 25 percent of all flood insurance claims come from areas with low-to-moderate flood risk. Those in low-to-moderate flood-risk areas may qualify for the Preferred Risk Premium, which can be less than $200 per year and includes coverage for a property's contents.
You can buy flood insurance for a property that has been flooded before. You can buy a policy any time though there is usually a 30-day waiting period for it to go into effect, but there are some exceptions. An insurance agent who offers NFIP insurance can help answer questions.
To learn more about flood insurance, visit the NFIP's Web site. As with any insurance purchase, when you consider buying flood insurance, you will need to decide how much, if any, coverage you are willing to pay for, and how much risk you are willing to assume if you don't opt for insurance.