You’ve heard the common stories. People who thought they had flood coverage didn’t find out they had enough coverage until it was too late.
Climate change is making is necessary to consider flood insurance, and it’s not just limited to people in coastal areas. The number of heavy storms is increasing the risk of inland flooding across the country.
Do you find yourself asking “How much flood insurance do I need?”
Read on to learn a few facts about flood insurance and how you know you have enough coverage.
1. You’re Not Covered by Homeowners Insurance
The biggest misconception about flood insurance is that people assume they’re covered through homeowners insurance.
Flood insurance is a completely separate policy that can be added to your homeowners policy. A standard homeowners policy will not cover you.
2. You May Be Required to Get Flood Insurance
If you just bought your home and you live in a flood zone, your mortgage company may require that you have flood insurance. Your lender has a financial interest in your home, and they want to make sure that it’s protected.
3. Flood Insurance Only Covers so Much
Flood insurance is usually limited to the structure of your home and the contents inside your home.
You won’t be covered if your car was damaged or if items outside like your patio were damaged. Don’t expect to be covered if your swimming pool or hot tub were damaged either.
4. You Can Get Insured Through the Government or Private Insurers
Flood insurance programs are usually purchased through the federal government. These programs are backed by FEMA where you buy insurance through contracted insurance providers.
There are also private insurers who have their own policies. You want to know what program you’re buying from before signing an insurance contract.
5. There Are Insurance Limits
If you purchase insurance through a federal program, there are limits to what the insurance will cover. The maximum coverage is $250,000 to cover the structure and $100,000 to cover the contents in your home.
If you need more coverage than that, you should go through a private flood insurance plan.
How Much Flood Insurance Do I Need?
The best way to calculate how much insurance you need is to assume that you lose everything in a flood. How much would it cost to completely rebuild your home and replace the contents inside?
That will be the amount of coverage you need.
You can take steps to protect your home with these watertight barriers. That will limit your losses, and some insurance companies may lower your premiums for the added protection.
Get the Right Flood Insurance
How much flood insurance do I need? That’s a question that you need to answer now before a catastrophe strikes.
You want to have enough to rebuild your home and replace the contents of your home. That number isn’t the same as the market value of your home. The amount of flood insurance needed may be more than the maximum amount through government programs.
In that case, you’ll want to go through private insurance companies. Come back to this site often for more real estate tips.