Flood Insurance for a Rainy Day
The idea that what was likely your biggest investment could potentially evaporate as a result of a home being damaged by flooding, is certainly motivation enough to buy good flood insurance. This insurance coverage compensates for damage to your home and surrounding property resulting from a flood event. It is supplemental coverage that goes way beyond the usual homeowners’ policy. Homeowners would be wise to remember that they do not have the protection of this insurance unless specifically purchased separately or as a rider or addition to an existing policy.
Flood coverage can be greatly beneficial and potentially a financial life-saver for one who owns home in an area where serious flooding has been known to occur more than once every couple of years. It is required in certain parts of the United States that are classified as high risk flood areas. Some examples would be certain wards in New Orleans or coastal strips of Florida, to name a just a couple. Banks, credit unions and other mortgage lenders mandate that home buyers obtain flood insurance for the duration of a mortgage, though regardless it is a no-brainer to have some level of coverage even after a home is paid off. And don’t expect the government to always come to the rescue as many homeowners without coverage will likely be ineligible for federal help.
Good flood insurance basically works similarly to a standard homeowner’s policy. The homeowner opts for the coverage he or she desires, usually for both the building and the contents within it. Annual premiums are then determined accordingly (often paid each month). Any flooding event that causes damage to a homeowner’s property can be filed for a claim according to the policy terms. An approved claim will then lead to a check (or electronic transfer these days) by the insurance company that covers any covered property loss and/or repair costs.
Those live in areas designated as floodplains or perhaps near shore are likely candidates for good flood insurance. Flooding can devastating even if it is only a couple inches of standing water. Once flood damage happens, the expenses in dealing with it can be insurmountable for most who do not have insurance. Summing this all up, one can assert confidently that if one is a homeowner who resides near a body of water, it is wise to seriously consider coverage of this kind.