American Option Flood Insurance
Flooding is the most common of all natural hazards; yet, many homeowners go
without flood insurance each year. Whether you are surrounded by a large body
of water or simply have a river near your town, flood insurance helps protect
your personal belongings and home against the devastation of flooding.
The National Oceanic and Atmospheric Administration (NOAA) estimates that,
on average, flooding causes more than two billion dollars of damage each year.
In recent years, the hurricanes affecting the Gulf Coast states and the flash
floods affecting the Midwest and Central Plain states have caused well over one
hundred billion dollars in damage. Whether it’s eight feet of water or even just a
few inches, flooding can quickly render a home uninhabitable and destroy a
lifetime of possessions. Given the relatively low cost of flood insurance, it’s a
common-sense decision for any homeowner.
Do I have to buy flood insurance?
If your home lies in a special flood hazard area (SFHA), most mortgage
companies will require you to carry a flood policy. If you don’t live in a special
flood hazard area, then the coverage is usually optional. Just because your
house wasn’t in a flood zone when you bought it doesn’t mean it will never be
in a flood zone. Flood zones are evaluated yearly, and flood zone designations
may change over time.
Even if you aren’t required to carry a flood policy, your home and belongings
could still be at risk. Just because you don’t have a beach in your back yard
doesn’t mean that you’re free from the risk of flood. Heavy rains, swollen
streams, and other weather and environmental fluctuations frequently cause
flooding to occur in areas not previously thought to be at-risk for flooding.
“Won’t my homeowner’s insurance cover flooding?” Standard homeowner’s
insurance policies do not cover damages caused by flooding. We have all seen
the damages caused by floods in different states over the last several years.
The Federal Government has set up the National Flood Insurance Program
(NFIP). The NFIP creates a map of the country and divides each area into
different “risk zones”. From there, the rates and coverages are formed. We
recommend that you enter your home’s address into their site and see where it
Your flood policy will help cover the structure of your home and personal
belongings. Regular water damage differs from the coverage you’ll enjoy under
a flood policy. Most policies require a 30-day waiting period, unless it is a new
purchase, so it’s essential to plan ahead. Many people will call about flood
insurance once they see a hurricane off the coast or a river’s waters rising, but
by then it’s too late.
Zones and flood insurance prices
Your risk zone will dictate the price of your policy. For instance, if you live in a
Preferred Risk Zone (B/C/X), a policy usually isn’t required and will be less
expensive. If you live in a Standard Zone or SFHA (A/V), you would have a 1%
chance of annual flooding or a 26% chance over a 30-year period and your price
will be higher. There is also the Undetermined Zone (D) that hasn’t been
analyzed, but risk still remains and is reflected in the price.
More on the costs of flooding:
Below is from the NFIP website and can help for illustration purposes.
Where should I start?
Give us a call at 888-985-4032, and we’ll outline your options and help you
determine the best coverage for your needs. Flood insurance is a far too often
overlooked product. You have options.