Here is a little flood insurance 101: Floods are the #1 natural disaster in the United States!
The greatest misconception homeowners have is thinking that flood insurance is covered under their current homeowners insurance policy. It is NOT! Damage caused by a sewer backup can be covered under a homeowner’s policy, if the coverage is included or endorsed on the policy, only if it is not a direct result of flooding.
The NFIP definition of flood is:
A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is the policyholder’s property) from one of the following:
- Overflow if inland or tidal waters
- Unusual and rapid accumulation or runoff of surface waters from any source
- Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.
When Am I Required To Have Flood Insurance?
Everyone lives in a flood zone, but what are the factors that require a homeowner to maintain flood insurance? If you live in a (SFHA) Special Flood Hazard Area or high-risk area and have a Federally backed mortgage, the mortgage lenders require you to have flood insurance. Although, flood insurance is not federally required if you live in a moderate-to-low risk flood area, homeowners are eligible to purchase flood insurance as long as their community participates in the National Flood Insurance Program, for a reasonable cost.
What Factors Affect Flood Insurance Rates?
Anyone can be financially devastated by a flood, but homeowners can help protect their home and contents by purchasing a flood policy. Flood insurance can be purchased through most leading insurance companies, the rates are set and do not differ from company to company or agent to agent. Rates depend on several factors including:
- Year of construction
- Building occupancy
- Number of floors
- Location of contents
- Flood zone determination
- The location of the lowest floor in relation to the elevation requirement of the flood map (in newer buildings only)
- The deductible you choose and the amount of building and contents coverage