Numerous natural hazards can damage or destroy your home. One threat that's more common than you may realize is flooding. There are flood zones all over the US, and there's a chance that your home resides in one of these zones. If you live where flooding is a possibility, you should strongly consider getting a flood insurance policy. Your homeowner's insurance is not enough to protect you in the event of a flood. Here are three things you need to know about flood insurance.
Your Lender May Require A Flood Policy
If you are on the hunt for a new home and plan to take out a mortgage, your lender may require that you take out a flood insurance policy on your new property. Many lenders require that you have flood insurance if you are moving into an area designated as a high-risk flood zone or in a floodplain. Typically the lender will require that you insure the structure, but if you live in a flood-prone area, you will also want to insure your belongings as well.
It's Useful Even If You're Not In A High-Risk Area
If you don't live in an area that's at high risk for flooding, you may end up skipping out on coverage. However, if you live in an area with any chance of flooding or close to a high-risk flood zone, purchasing a flood insurance policy is still a good idea. There are plenty of online resources that you can use to determine the flood risk for your home. If you live in an area with low flood risk, you'll also find that your insurance rates will cheaper than the rates for areas at a high risk of flooding.
Your Flood Risk Determines The Cost
Another thing that you need to know about flood insurance is that the main factor for determining how much you pay for a flood insurance policy is your flood risk. The greater your chances are for flooding, the more your policy will cost. While your flood risk plays a significant role, your flood insurance company will also consider other factors when drawing up your policy. Other things that will impact your premium include what state you live in and the age and construction of your home.
Flood insurance is essential in many parts of the country. There are a few things that you should know about this kind of insurance. Depending on where you live, your lender may require that you obtain a flood insurance policy. Even if you don't live in a high-risk area for flooding, you'll still want to consider buying flood insurance. While different factors come into play when determining your rates, your home's flood risk has the most significant impact.