If your home is in a flood zone, mortgage lenders will likely require you to have a flood insurance policy. You can check your risk by entering your address on FEMA’s map portal.
Even if you are not in a flood zone, you should consider purchasing a flood policy. Standard homeowners insurance does not cover flood damage.
Floods are a Natural Disaster
Floods are among the most common and costly natural disasters in the United States. They can wreak havoc on homes and businesses, displace families, damage crops, and destroy infrastructure. They are also a leading cause of death from natural disasters. Floods kill more people than tornadoes, hurricanes, and lightning strikes combined.
Homeowners’ insurance typically does not cover flooding. To obtain coverage, homeowners must buy separate flood insurance policies. In addition, government-backed mortgages usually require flood insurance in high-risk areas.
Floods are unpredictable, and even areas not considered at risk for floods can experience severe water damage. Floods can occur anywhere water can accumulate – from rising river levels to the sudden collapse of levees or dams. As a result, it is essential to be prepared for the unexpected. Make a plan for your family during a flood, including evacuation routes and shelter plans.
They are Expensive
You might not be required to get flood insurance by your mortgage lender if you live in an area outside of FEMA’s high-risk zones, but you should still consider obtaining coverage. After all, floods don’t follow maps, and even one inch of water can cause substantial damage to your home and possessions.
The standard flood policy from the National Flood Insurance Program (NFIP) covers up to $250,000 in building damage and $100,000 in contents coverage. For homeowners who want more coverage than this, private insurers can offer excess flood policies for an additional cost.
There are a few ways to reduce the cost of your flood insurance policy in PA, including choosing a higher deductible for building and content coverage; this can lower the premium by up to 40%. You can also raise the elevation of your house by putting in flood openings or elevating water heaters and electric panels. Lastly, you can submit an elevation certificate to your insurer to help them determine your risk and give you a better rate. This is a process that takes about 30 days.
They are Unpredictable
Although flooding can occur everywhere, some areas are more prone to it than others. The location of your home will determine how much you pay for flood insurance and whether or not your mortgage lender requires it. Your insurer will consider your building’s elevation, rainfall, river flow and tidal surge data, the area’s history of flooding, and any flood control measures.
Even if you live in an area considered low-risk, it’s worth getting an estimate from an insurance company to find out how much your premium would be. You can also do things to reduce your risk, such as by having an elevation certificate done on your home and installing backflow valves in sewer lines.
You can also avoid being required by your lender to have flood insurance by finding properties that aren’t in flood zones or having a survey done to see if your specific property is lower than FEMA’s maps indicate. However, the cost of flood insurance can be prohibitive for some homeowners, especially if they live in states most affected by climate change.
While it’s easy to assume you need flood insurance if you live near a river or body of water, flooding can happen in any environment. Weather patterns constantly change, and many areas are more prone to flooding than they appear on FEMA’s maps.
Research Before Buying
If you’re considering buying a home in an area that’s prone to flooding, make sure to research it carefully. You can look at FEMA’s map service center to see if your property is in a flood zone, defined as having a 1% or greater chance of flooding in any given year.
The federally backed National Flood Insurance Program typically requires people who take out mortgages from federally regulated or insured lenders to buy flood insurance if their home is in a high-risk area. However, even those who live in low-risk areas should consider purchasing a policy, as they can still be vulnerable to flooding due to things like climate change. Floods can also cause significant damage to roads, bridges, and other public infrastructure that can affect everyone.
They are Expensive to Repair
Unlike fire or wind damage, floods are not covered by standard homeowners policies. Instead, people looking to protect themselves against flood damage must purchase separate flood insurance through NFIP or private insurers.
When choosing a policy, be sure to consider the type of coverage and its limits. There are two primary options: replacement cost coverage and actual cash value, which pays out based on the depreciated value of your property. Also, pay attention to how your deductible is structured and whether or not you want personal contents coverage.
Generally, higher-risk homes (those in Special Flood Hazard Areas) will have more expensive premiums than lower-risk properties. However, FEMA now offers a new Risk Rating 2.0 system that does not solely use maps to determine rates. This new rating system considers foundation type, elevation, home age, and replacement costs to calculate a policy’s rate. The new rating system will help reduce the disparity in insurance rates between high- and low-risk areas, but it does not eliminate it. That’s why it’s essential to review your risks and consider purchasing flood insurance sooner rather than later.
