Flood Insurance

What is Flood Insurance?

Flood insurance is used to provide specific insurance coverage for property loss and damage due to flooding. The risk factors associated with the insurance is determined by looking at topographical maps which are used to reveal floodplains, floodways, lowlands, and other areas that are more likely to be susceptible to flooding. The National Flood Insurance Program defines flooding as “a general and temporary condition of partial and/or complete inundation of two or more acres of normally dry land area or two or more properties (at least one of which is your property) from – overflow of inland waters, unusual and rapid accumulation, runoff of surface waters from any source, and mudflows.”

What Does Flood Insurance Cover?

It has been said that only 20% of American homes that are at risk for flooding are covered by flood insurance. Most of the private insurers do not provide insurance for floods because of the prevalence of people purchasing insurance because they are the most affected by flood itself. In flood insurance, the amount of claimants is larger than the amount of persons who are wishing to protect their property from floods, which means the probability of gaining profit from flood insurance is very remote and unlikely for most private insurers.

What Are the Cost Expectations for Flood Insurance?

The costs expectations for flood insurance tend to vary depending on your location. However, the average flood insurance policy is said to cost less than $570 per year. Sometimes the amount for insurance – specifically the premium rates – are said to vary depending on the type of properties that you have or the amount of properties. Obviously, if someone has numerous properties, they are going to pay a much higher premium rate than those who only have one property. Like anything else, the rates also vary between the insurance providers as well, so consumers have to be aware and compare their options before they commit to an insurance policy.

What Are the Benefits of Flood Insurance?

Obviously, if you live in an area where there is a high chance that there is going to be a flood, you’re going to be the one that benefits from this type of insurance the most. If your property is damaged, being insured can provide you with the money necessary to make the repairs and get back to your usual standard of life. In situations where there’s a loss of property, it may help to provide enough coverage so that you will be able to find another location to live at. However, people always have to be considerate of where they are living at; there are a lot of people who invest in flood insurance simply because they want to be certain that they will be protected if a flood ever occurs, only to realize that the insurance may not be necessary based on their geographic location. In essence, the overall benefit of flood insurance is the same as other insurance programs. The main benefit is to offer protection against something that could damage not only your home, but your livelihood.

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