Flooding can cause a lot of
damage to your home in a short amount of time, and everyone
is susceptible, no matter what part of the country you call
home. You may think your homeowners policy already covers
flood damage, but beware – this is not necessarily the case.
Purchasing flood insurance is one of the best choices a
homeowner can make to protect their financial security.
Flood insurance is not very expensive, but most Americans
have yet to purchase a policy. In 2000 the average flood
insurance premium was $353 per year. You can buy flood
insurance in three forms: Dwelling, which covers most homes;
General Property for apartments and businesses; and
Residential Condominium Building Association Policies for
condominium owners.
If you live in a low to moderate risk zone, a discount may
be available as well.
Keep in mind that it takes 30 days for a flood insurance
policy to take effect, so rushing out to buy a plan right
before expected flooding is not a good idea. Be prepared
ahead of time so that the flood insurance you purchase will
be available when you need it.
Flood insurance operates a little differently than other
policies. The federal government sets the rates, so choosing
a company will depend, not on price, but on the level of
service being provided. Ask questions during the
decision-making process – how quickly are claims resolved?
Companies that aren't doing very well don't pay out as
quickly as institutions doing well in the industry.
Some companies provide insurance across the nation, but many
do not. Make sure you select a company that is known for
good coverage in your area.
Homeowners can insure their homes up to $250,000 and the
contents for up to $100,000. Renters also receive excellent
coverage, but only for personal contents, up to $100,000.
Property owners have the option of insuring their buildings
and the contents up to $500,000.
Flood insurance coverage is not difficult to obtain, and can
be quite affordable. You will sleep easy knowing that your
home and/or possessions are protected in the event of a
devastating flood. Flood insurance is an investment in your
peace of mind. |
