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Flood Insurance

Many people make the mistake of thinking that they are covered for flood damage by their homeowner’s or tenant’s insurance, but these policies specifically exclude flooding. If you live in an area prone to flooding then you need to take out flood insurance. This is a special insurance policy sponsored by the federal government through the National Flood Insurance Program (NFIP) and purchased through private insurance companies.

Flood insurance is available to those living in communities that participate in special zoning and flood mitigation measures set by FEMA (Federal Emergency Management Agency). If your community does not participate then you will not be able to purchase flood insurance. Federal flood insurance also excludes certain coastal barrier areas, such as parts of the Florida panhandle, the North Carolina Outer Banks and areas in Delaware and South Carolina. Some private insurance companies may offer flood insurance for areas excluded by the federally sponsored program, but your premiums will be much higher and your coverage more limited.

Flood insurance covers you for damage to your home, business and contents due to surface accumulation of water from inland or tidal flooding, erosion due to flooding and mudslides. The federal government sets the rates for flood insurance. Coverage is limited to a maximum of $250,000 for your home, up to $100,000 for contents for either homeowners or renters, and up to $500,000 for non-residential buildings and contents. There are separate deductibles for buildings and contents. Rates are relatively inexpensive and even lower if you live in an area at low risk for flooding. If you are in a high risk area and you take damage-preventing measures, you can be reimbursed up to $1000 for renting storage space or pumps and buying sandbags and lumber. Flood insurance has a 30 day wait period before coverage starts, so you will not be insured if you wait until a flood forecast to take out your policy.

When choosing an insurance company for flood insurance, check how promptly it resolves claims. Some insurance companies specialize in specific regions, while others offer flood insurance policies nationally. Under the NFIP program, flood insurance is an affordable way to protect your home, business and contents from disastrous flood damage.