There are many risks that people are accustomed to insuring against. These will include, health insurance, auto insurance and fire insurance. There are others that are less familiar, such as dental and flood insurance but there are many reasons why you should reassess the insurances you currently have in place and perhaps consider relocating them to cover the risks that you are most afraid of experiencing.
For example, did you know that losses due to floods are thirty times more likely to occur than fire losses? This is especially true if your home is located in a flood prone zone. While flood loss is generally less devastating than fire loss, if your home is located in a flood prone zone, the chance of even experiencing catastrophic damage is still 25% greater from flood than from fire.
Flood loss
Most basic home insurance policies do not automatically include flood loss as standard. Commercial property policies are the same, with flood loss only being covered if it is specifically mentioned in the policy. If the flood is extremely severe, it may be classified as a disaster site by the federal government. This will cause some protection to be made available in the form of loans. These loans, which come through the Federal Emergency Management Assistance program, are not like insurance however, as you are required to pay back the loan that they give you, as well as any other home loans you already have. They will also require you to carry flood insurance in the future. The other thing about the Federal Emergency Management Assistance program is that it only kicks in if your area and flood are declared a federal disaster site. This can be fairly rare when compared to the amount of floods that are experienced annually.
Flood insurance will be offered by various insurance companies but should be backed by the National Flood Insurance Program. This type of coverage, which is supported and regulated by the federal government, is the only type of flood insurance that will fully protect your home and contents from rising water flood insurance.
Shop Around
If you are considering taking out a policy of this kind, shop around for the best rate and find out what is covered and what is excluded. It may be that a specific company’s exclusion is exactly the situation in which you require coverage and other companies may not have the same exclusion so you are wise to shop around. Also, all insurance companies vary in what they offer and what they charge. Do not accept the first offer or quote you receive and do not expect all companies to provide the same deals. You should always shop around when it comes to insurance and find yourself the best deal available.
The first thing you need to know about flood insurance is that it is not covered in the basic home owner's insurance. Necessity of flood insurance is determined by the geographical zones your property is in. Although everyone lives in a flood risk zone, FEMA, or the Federal Emergency Management Agency, has specific information on the risks associated with various areas and therefore whether there is need for flood insurance to cover flood damage.
Zone boundaries are shown on flood risk maps, with areas classified as low to moderate risk and others, as high risk. If your house is in a high risk zone and you receive a mortgage loan from a lender regulated by the government, you are required by law to get flood damage insurance. On the other hand, people in low risk areas are not required to obtain this insurance.
For those obtaining flood damage insurance, there is a 30-day waiting period from date of purchase before an insurance policy becomes effective. When buying flood damage insurance, it is important to talk to an insurance agent who will advise on the kind of flood insurance that will best serve your interests. Flood insurance cover is provided by the National Flood Insurance Program through some 85 insurance companies. While your bank or insurance company may require you to carry flood damage insurance, it really is your responsibility to maintain adequate cover limits. FEMA's classification therefore helps new landowners determine flood insurance needs and also provides a useful guide on channels to follow when pursuing flood insurance claims.
Even with FEMA's classification of risk zones, home owners need to be aware that they do not have to live in high risk zones to get flooded. About a quarter of all flood insurance claims come from low risk areas as a result of storms, melting snow or even dam failure. Flood insurance is also attractive because it is not exorbitant and a landowner will be paying about USD 300 annually for a cover worth USD 100,000. Flood insurance is also attractive because claims are normally paid even when a federal disaster is not declared. Perhaps the real reason why one should obtain flood insurance is the fact that the cost of repaying a disaster loan is 12 times as expensive as paying the annual flood insurance. And such loans are only available when a disaster is declared by the federal authorities, which does not always happen.
Should your home get flooded during a storm, you should immediately assess the flood damage. To assist you in doing this, you should take pictures as these will act as records and proofs of the loss. You should also alert your insurance agent immediately to obtain expert advice on how your insurance policy could help. This is especially important when you appreciate that the basic home owner's insurance does not cover flood damage.
Both Joseph Kenny & Charmaine Pierce are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Joseph Kenny has sinced written about articles on various topics from Credit Cards, Debt Consolidation and Credit Cards. Joseph Kenny is the webmaster of the insurance site where you will find information, news and links to the leading providers of. Joseph Kenny's top article generates over 550000 views. to your Favourites.
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