Flooding is the single most common natural disaster in theUS, occurring in all 50 states, at most any time of year, and for a variety of reasons. Whether it is the result of a burst pipe that floods part of your home, to a major flash flood that sweeps through entire regions devastating life and property, flooding is a concern that should be on the mind of every property owner, either commercial or residential.
When floods do occur, it is a foregone conclusion that people with flood insurance full realize that they made a wise choice. Flooding isn’t normally covered under the average homeowners policy, and while flood damage may be obtained for an additional premium, it isn’t offered by every provider. This means that at least a percentage of property owners will have to go looking for it.
It doesn’t take any more then one or two inches of water in your home to cause major flood damage, and with that in mind, the federal government established the National Flood Insurance Program in the late 60’s to provide a solution for this problem. It is a federally funded, low cost method of protecting your property, sold through private insurers throughout the country, but particularly in the most flood prone areas of the country. It is available to residents in any community that participates in the program.
As of this year, 21,564 communities participate in the NFIP. Membership requires the community to adopt and administer flood hazard regulations in accordance with federal guidelines. Homes in these high risk areas have a 1 in 4 chance of being flooded during the average 30 year mortgage, significantly higher than most areas of the country, which explains why home buyers in these communities are usually required to purchase flood insurance.
It is important to remember, however, that flooding can occur anywhere, and that 20% of all flood insurance claims come from areas normally deemed low to moderate risk.
Unfortunately, too many homeowners overlook the flood insurance option, believing that it is beyond their reach, and that money might be better spent in the current sluggish economy. The NFIP understand this concern and has worked diligently to alleviate it. The average flood insurance premium is between $600-$700 per year, while coverage through the NFIP averages out around $130-$150 per year (in low risk areas, high risk locations will have higher premiums). It largely depends on how much coverage is purchased, coupled with the area’s flood risk.
Flood insurance can cover up to $250,000 for the structure and $100,000 for contents, while business plans may cover $500,000 for structure and $500,000 for contents.
Too many homeowners make the mistake of thinking that federal disaster aid will take care of them, not realizing the government aid usually comes in the form of low interest loans that have to be paid back, whereas with flood insurance, you’re only out a nominal premium.
Remember that it takes up to 30 days for a flood policy to go into effect, so now is the time to see to this before severe weather season really gets underway.
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