What to Know Before Buying Flood Insurance Services?
Buying Flood insurance services may not seem important to city dwellers. However, those people who own beach side property. They know the dangers of flooding very well. Just a few inches of water can cause tens of thousands of damages in dollars. That is why several mortgage lenders require the borrowers. To buy flood insurance services to live in certain flooding prone properties.
Necessity of Flood Insurance
If you move into a new area. It may not seem like buying flood insurance is a necessity. You must contact Federal Emergency Management Agency (FEMA) to ensure your area is at risk for flooding or not.
What are Main Causes of Floods
- Heavy or Prolonged Rain
- Melting Snow
- Coastal Storm Surges
- Blocked Storm Drainage
- Dam Failure
- Changing Tides
Workings of Flood Insurance Services
Flood insurance is different from basic hazard insurance coverage clause in homeowner’s insurance. It covers minor damage, such as, a burst pipe. It does not cover damage or destruction from heavy floodwaters. Flood insurance services are required for this phenomenon.
It works like any other insurance policy. The individual who requires this service can buy it from a respectable insurance provider near him or her. The individual also is required to pay an annual premium based on the flood risk of property. And the deductible chosen. If the property receives damage from flooding, as a result. Then the homeowner receives cash from insurance company to repair or rebuild the property. The upper limit to be received is defined by the insurance contract.
Flood Insurance Coverage Parameters
Flood insurance services usually provide the coverage for following items in a building’s structure:
- The overall structure of the building and its foundation
- The Electrical Systems
- The Plumbing Systems
- The central air conditioning equipment
- Water Heaters
- Cooking Stoves
- Built-in Appliances such as dishwashers
- The carpeting which is permanently installed over an unfinished floor
- Permanently Installed Paneling
- Wallboard Installed Permanently
- Permanently Installed Bookcases
- Permanently Installed Cabinets
- Window Blinds
- Detached garages up to 10% of building property coverage
- Debris Removal
Many important and expensive things are not covered under flood insurance services, as specified by FEMA. These parameters and items include following:
- Personal Clothing
- Furniture such as Chairs, Tables etc.
- Various Electronic Equipment such as TV, Computer etc.
- Portable Air Conditioner
- Window Air Conditioner
- Portable Microwave Ovens
- Portable Dishwashers
- Carpets Detached from Building Structure, such as Rugs
- Clothes Washers
- Clothes Dryers
- Food Freezers or the Food Contained Within
- Avoidable Damage Caused by Mildew
- Certain Personal Valuable Items such as Assorted Artwork
- Avoidable Damage Caused by Moisture
- Avoidable Damage Caused by Mold
- Damaged Paper Currency
- Precious Metals
- Valuable Papers such as Stock Certificates
- Vehicles such as Cars
Government Sponsorship (NFIP)
FEMA offers flood insurance to individuals under National Flood Insurance Program (NFIP). The actual insurance is not offered by government, but private insurance companies. FEMA only provides sponsorship’s for those who live in a high-risk area. FEMA issues up-to-date maps of flood zones in U.S. They keep track of areas or zones which change with intensifying weather patterns. The zones are further subdivided based upon the risk of disaster.
Cost of Flood Insurance Services
The premium cost of acquiring cheap flood insurance services can vary on a number of factors:
- Location of your home
- Structure of your home
- Proximity of your home to water
- Elevation of your home
- Flood zone designation
- Age of property
- Number of floors
- Existence of flooding safeguards in your home
According to NFIP sponsorship, the maximum coverage available for residential property is $250,000 for the building structure and $100,000 for the contents. The maximum coverage available for commercial property is $500,000 for the building structure and $500,000 for the contents.
Note: All such factors determine that the flood insurance cost can vary from $573 to $1,395. Which makes the Average cost of flood insurance is $699 annually.
Avoiding Buy Flood Insurance
There are several options available to individuals who are looking for ways to avoid buying flood insurance. These options may not be feasible for everyone. Similarly, these options are especially hard in their applicability to those living in high-risk areas.
Research: You must thoroughly research the area and the property before buying it. Contact relevant government agencies or a private agency and determine how much is the flood risk factor on said property.
Renovation: You can renovate your home if you think it might be at a risk of flooding. You can also fill crawl spaces and turn the basements or other at-risk areas into solid foundation. You can even retrofit your home above your area’s base flood elevation.
Why SG Financial INC
SG Financial Inc. provides flood insurance services in Dallas, Texas with complete FEMA requirements. Please contact us for more information.
Note: Flood Insurance services are not covered under typical homeowner’s insurance.