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Top 4 Tips for Buying Just the Right Flood Insurance

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flood insurance tipsIf you are happy that you have bought homeowners insurance, I am sorry to spoil your happiness, by saying that you still lack something important! It’s flood insurance.

Floods and damage caused by them occur in 90% of all natural calamities occurring in the United States, as per the nonprofit Insurance Information Institute (III). Thus floods are the most common natural calamities in the US.

You may think you can skip flood insurance if you are living far from shorelines. However, 25% of flood insurance claims are paid to homeowners living in areas supposedly having low to moderate risk of flooding, as per the FEMA (Federal Emergency Management Agency). Thus just as flood insurance Florida is necessary, it’s necessary for Arizona too (which was flooded in September 2014 due to torrential rain storms).

flood due to torrential rain

Following are a few useful tips that will help you in buying just the right flood insurance.


1. Understand Basics


In the US, flood insurance is provided by the federal government to homeowners, businesses and renters through the NFIP (National Flood Insurance Program).

Understand that flood insurance comes in two individual policies – one for your structure and other for contents.

Structural coverage covers damage caused to your home while contents coverage covers the damage caused to your personal belongings.

Limits are placed by NFIP on the amount of protection provided. For residential properties, structural coverage is limited to $250,000. Both renters and homeowners can insure their contents for up to $100,000.

For people owning their homes outright, flood insurance is optional. But if you opt for a mortgage, your lender may compel you to buy a policy. Also if you live in a flood-prone area and have got mortgage through a lender who is federally regulated or insured, you should buy flood insurance.

flood prone area

2. Think if You Require Private Coverage


Most homeowners buy their flood insurance through NFIP. This coverage is fairly cheap since the government keeps the premium low by not entirely pricing in the flooding risk.

Flood insurance is also sold by some private providers. It’s a bit more expensive than government’s insurance because it entirely prices in flooding risk. But due to this extra price, it makes sense mostly for those who want coverage beyond the coverage limits provided by the government. In such a case, homeowners can buy a NFIP policy and also a separate policy from a private insurer to get more coverage than that provided by NFIP.


3. Know What’s Covered and What’s Not


If you have got building coverage, your home’s structure, its foundation and plumbing and electrical systems are protected in the event of a flood. Garages are often insured up to 10% of the limit of the building property coverage.

Other things covered are:


  • Water heaters
  • Central air conditioners and furnaces
  • Refrigerators
  • Window blinds
  • Permanently installed wallboard, carpeting, cabinets, bookcases and paneling


Contents coverage will protect possessions including furniture, clothing, electronic equipment and valuables like artworks or furs.

However, flood insurance doesn’t cover damage caused by moisture, mold or mildew that could have been prevented. Also damaged resulted from sewer or drain backup isn’t covered. Items that surround the insured structures are also not covered, such as decks, trees, swimming pools and patios.


4. Basement


If you have a basement, naturally you have a lot of concern about its protection from flood. However, remember that you are unlikely to get protection for your basement. The NFIP coverage for basement is very limited and doesn’t cover all the items there. This may be a problem if you have turned your basement into an apartment. Parts of basement like finished walls, ceilings, floors and personal belongings are not covered under flood insurance.

Know more about Miami flood insurance and flood insurance for other states to understand how to buy flood insurance and get what is the most beneficial for you.

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