Understanding the Availability of Flood Insurance in Your Area

If you live in a flood zone and you are financing your home, your lender has the right (as well as the responsibility) of making sure that you have flood insurance. Nationwide, it is believed that only about 20% of all property in the United States is in a flood zone. However, the federal government does require that any properties that are in these zones who have qualified for government loan guarantees carry flood insurance.

In spite of the low number of properties that are in designated flood areas, FEMA estimates that approximately 1/3 of flooding claims come from properties outside of those areas. Unfortunately, many people believe that their traditional homeowners insurance will protect them for damages caused by floods.

Flood insurance, like other insurance, has specific riders. Riders can include items like coverage of your building and the contents such as machinery, and in homes, personal property. Certain conditions may be imposed on your flood policy so you must verify what is covered. Flood insurance may also have a personal property rider to be used only on items that are in the affected property. This would exclude external items such as cars and recreational vehicles. If you believe that flooding could result in a necessity for debris removal, you should check your policy carefully for coverage of these expenses.

Special coverage is also available to provide coverage if you are forced to remove your belongings to another location to protect them from potential flooding. This type of policy would apply if you have sufficient reason to believe that your property is potentially threatened by a flood. There are restrictions of this coverage that must be carefully noted when you make your application.

One other item that you may need to verify if you are applying for flood insurance is how property located in your basement is covered. There are some restrictions that you should be aware of before you sign up for your policy.

The cost of flood insurance is typically fairly low, when you consider the damage that can be done to your personal property. There are some items that are excluded from flood coverage including personal documents, automobiles, and pets. Find out what exclusions apply to your policy. But do arrange for coverage, before it is too late.