With climate change making flood damage a common threat, having the right coverage is more important than ever. Standard homeowners’ insurance typically doesn’t cover flood damage, so a separate flood policy is a must.
Remember that maps can change even if you live in an area that isn’t at risk. And as little as one inch of water can cause significant damage.
Location
Depending on where you live and who your mortgage lender is, you may be required to have home flood insurance. For example, homeowners who live in a high-risk flood zone and have a federally backed mortgage (FHA or VA) are typically required to purchase this insurance.
A standard homeowners insurance policy doesn’t cover flooding, so it is important to have a separate flood insurance policy. To determine your area’s risk for flooding, use the FEMA Flood Map Service Center and enter your address. Suppose you live in a Special Flood Hazard Area or an area with a 1% chance of flooding in any given year. You will likely need a standard National Flood Insurance Program (NFIP) policy covering the structure and your personal belongings.
You should also get an elevation certificate, which is a document that shows your property’s elevation according to the Base Flood Elevation set by FEMA. This can help you calculate the cost of an NFIP policy and also help you understand how much your home might be worth in case a flood damages it.
For those who don’t live in a high-risk area, it’s still a good idea to consider purchasing a NFIP policy. This insurance can help you recover more quickly from any damage and helps reduce the stress of rebuilding.
Structure
Unlike standard homeowners policies, flood insurance covers damage to your home’s structure and its contents. It also offers monetary compensation for items like built-in bookcases, paneling, and wallboard.
A standard policy covers up to $250,000 for a single-family home’s structure and $100,000 for its contents. It also provides monetary assistance for the expenses associated with relocation during a flood.
As with other types of insurance, the premium for the policy of a home flood insurance in Louisiana will depend on how much coverage you purchase and where your property is located. The National Flood Insurance Program (NFIP) is subsidized by the federal government, meaning your rates will be lower than what you would pay for a private insurer offering this type of coverage.
Homeowners living in Special Flood Hazard Areas must carry an NFIP policy by law, and most mortgage lenders will require flood insurance as a financing condition. However, many people in other areas considered moderate or low risk do not carry a policy.
A quarter of all flood insurance claims are made for properties outside high-risk zones. This is because mapped flood hazard areas are based on historical data and do not necessarily reflect the actual risk of flooding. In these cases, a homeowner may qualify for the NFIP’s Preferred Risk Policy, which offers building and contents coverage at a slightly lower cost.
Contents
Home flood insurance is typically a separate policy from standard homeowners insurance and covers property loss for damage caused by flood waters. The National Flood Insurance Program (NFIP) provides policies for a residence’s building and personal contents, with two types of coverage: actual cash value and replacement cost. Most policies cover at least 80% of the value of the building. However, certain items, such as window treatments, paneling, and bookcases, are not covered. In addition, if a basement or below-ground living space is damaged by flooding, most policies limit the amount that will be paid for these areas to what it would cost to replace the building materials.
While most homeowners and renters obtain flood insurance through NFIP, private companies offer new options that provide broader coverage for less money. If you live in a high-risk area, a mortgage lender may require that you purchase a flood policy as part of your loan agreement.
While flood insurance is necessary, it’s important to remember that water can find its way into homes and buildings from any direction and at any time of year. The best time to determine if you need a flood policy is before a storm hits, but even if you live in a low-risk area, it’s worth checking the NFIP’s flood maps regularly. After all, weather patterns or nearby construction changes can change your property from a low-risk zone into a high-risk area.
Liability
When you have a home flood insurance policy, you are protected from financial loss in a flooding disaster. The policy will reimburse you for repairing or rebuilding your property and cover moving and relocating your possessions. Most policies will include coverage up to $250,000 for the building structure and $100,000 for the contents of a single-family dwelling. Additional coverage for sewer backup may be available.
Depending on your area, you could be at risk for flooding due to rainstorms or from nearby bodies of water. You can check to see if your home is in a flood zone by looking at FEMA’s maps. Mortgage lenders often require homeowners in high-risk areas to carry a home flood insurance policy.
While most homeowners insurance covers the structure of your house and the belongings you keep inside it, a separate home flood policy can also cover other sources of water damage. These include burst pipes, flooded basements, and other unexpected events not typically covered by most standard homeowner’s insurance policies.
