What You Need To Know About Flood Insurance

The recent floods across Texas have highlighted the need for homeowners to have comprehensive flood insurance. The start of the official Atlantic hurricane season on June 1 also shows why homeowners in coastal areas need flood insurance coverage. Despite these issues, a spokesperson for the Insurance Council of Texas stated that more than half of all the homeowners affected by the recent storms did not have the coverage they needed.

Flood Insurance Providers

A standard homeowners insurance policy does not include flood protection. Several factors have led private insurers to stop providing flood insurance coverage. Heavy rains, massive hurricanes and powerful tornadoes across the country in recent years have persuaded most private insurance companies to get out of the flood insurance business. Today, homeowners can apply for flood insurance through the federally-run National Flood Insurance Program. The program, operated by the Federal Emergency Management Agency, gives homeowners in high-risk areas the protection they need.

What Flood Insurance Covers

According to an NFIP report, the average residential flood insurance claim was $42,000 in 2012. The minimum flood insurance policy offered by NFIP covers $20,000 for damages to the home, plus $8,000 for the furniture, appliances, and other contents. Maximum policies reach up to $250,000 for the home and $100,000 for the contents. Private insurers can offer supplemental coverage beyond these amounts, but they typically do not offer basic flood coverage policies. The coverage levels are based on cash value, not replacement value.

Costs of Flood Insurance

The NFIP report also stated that the average annual premium for its flood insurance coverage is $650. Areas that have have higher flood risk may see higher flood insurance premiums. Homeowners can determine what the average premium for their area would be by finding out if their home lies in a Special Flood Hazard Area (SFHA). Property owners in an SFHA can check with their state to see if they are eligible for coverage through the Fair Access to Insurance Requirements Plans.

Reasons for Flood Insurance

Some homeowners may believe that their home does not lie in a high-risk area for floods. These homeowners opt out of purchasing flood insurance at their own risk. Numerous weather events in recent years have caused FEMA and other federal agencies to re-evaluate who should purchase flood insurance. For homeowners considering property in a high-risk area, many mortgage brokers require the owner to purchase insurance before approving the mortgage loan.

Source: CBS News

Get Answers For Your Flood Insurance Claims Lawsuit Questions

To find out how we can answer your questions about flood insurance claims lawsuits, contact one of our attorneys today. Our intake team will take down the details of your case and quickly connect you to an attorney who understands how to get the most from your flood insurance claims lawsuit. You can also fill out the “Free Case Evaluation” form at the top of this page.