6 Things You Should Know About How Flood Insurance Works

Severe weather can happen anywhere. Even in areas where floods don't normally occur, homeowners can suffer costly losses from floodwaters when they least expect it. You don't have to live along a coastal area or river. Your home can incur flood damage from a tiny creek that overflows during heavy rains, melting snow, or water running down a steep hill. That's when flood insurance can assist with the costs, but it helps to know some key facts about how the coverage works before floodwaters rise.

  1. A flood insurance policy to protect your home and its contents is a policy that you buy separately from your standard homeowners policy. Anyone can experience flood damage; therefore, it makes sense to buy the added coverage so that you are prepared in case unexpected flooding occurs.

  2. If your home has been flooded in the past and you didn't have flood insurance then, you can buy it now. Premiums vary depending on where you live. You'll pay a higher premium if you live in a high-risk flood zone, but it's still cheaper than paying for flood damages out of your own pocket.

  3. Even though it's backed by the U.S. government, taxpayers don't fund the National Flood Insurance Program (NFIP). Insurance companies that offer flood insurance pay the claims from the annual premiums that you and other policyholders pay. The NFIP offers affordable flood insurance to homeowners who live in communities that participate in the program and meet FEMA requirements to reduce the risk of flooding. You must buy a policy through an insurance agent, not directly from the National Flood Insurance Program.

  4. You can purchase flood insurance even if you don't live in a flood-risk area providing you live in a city or county that participates in the program. Many claims nationwide come from homeowners who live outside mapped high-flood-risk areas. A Preferred-Risk Policy is available at lower premiums to homeowners who live in low-to-moderate flood-risk zones.

  5. If you're counting on the federal government and not flood insurance to get you back on your feet, don't make that mistake. The Federal Emergency Management Agency (FEMA) provides financial assistance only to flood-ravaged areas that are covered under a federal disaster declaration. Unfortunately, not everyone who suffers serious flood damage lives in a county declared a disaster-designated area. Therefore, you would not qualify for federal assistance.

  6. If you have flood insurance, you can file a claim even if the President doesn't issue a federal disaster assistance declaration. But if you live in a disaster-designated county and have flood insurance, you can still register with FEMA for federal disaster aid to help cover losses from flooding that exceed your policy limits.

To learn more about your options, visit websites like http://www.normanheilinsurance.com.