Homeowner's Insurance in a High Risk Flood Zone

Homeowner's Insurance in a High Risk Flood Zone

Protecting Your Home When Mother Nature Wants to Send You Down the River

No one who saw the damage inflicting by Hurricane Katrina only a few short years ago can deny that having

It's important to protect your home against flood damage BEFORE you end up swimming in your living room.

homeowner's insurance in a high risk flood area is a necessity. The storm caused over $80 billion in damages, making it the most expensive cyclone in U.S. history-and leaving thousands homeless when they found out that the homeowner's insurance policies they had paid in good faith for years wouldn't cover the flood damage that was responsible for completely gutting their happy homes.

Reading the Fine Print

It's one of those "fine print" clauses that's really easy to miss-the fact that even though most homeowner's insurance policies will cover the damages inflicted on your home by the winds and hail that may accompany a hurricane they won't pay for any of the flood damages that actually cause most of the irreparable destruction in the wake of these storms.

The question is, if your homeowner's insurance policy doesn't cover flood damages, what can you do? Relax. Flood insurance is a still a part of your balanced coverage package.

Voluntary vs. Involuntary Coverage

Allstate. Liberty Mutual. State Farm. These are the biggest names in homeowner's insurance, but most people who live in a high risk flood area are going to find that convincing these companies to sell them a flood coverage policy are going to find themselves out of luck. Why? Because these are voluntary coverage agencies agencies, which means they don't have to insure anyone they don't want to.

Okay, so everyone knows that insurance companies don't want to pay out claims unless they have to. If you've ever watched your auto insurance premiums climb after an accident you've seen this policy at work. Homes inside a high risk flood zone have a 26% chance of suffering flood damage over the course of a 30 year mortgage, which means there's a 26% chance that your insurance company is going to have to pay a claim.

Those numbers are too high for most companies, leading them to either:

a) Refuse to insure a high risk home, or

b) Charge you a ridiculous premium every year.

The good news is, as a homeowner you have options when it comes to your flood insurance. If you've been refused coverage because you happen to live along the Gulf of Mexico or some other area that sees its city streets turned into swimming pools on a regular basis you have the option to contact FEMA and purchase coverage through the NFIP (National Flood Insurance Program).

If it's simply a matter of lowering your premium to protect your home without having to live on Ramen and Spaghetti-O's for the next 30 years there are steps you can take. Voluntarily raising your deductibles (within reason) and elevating your basement and the lower levels of your house to minimize flood damages will send your premiums plummeting. Many companies offer you a discount for purchasing more than one type of coverage from a single provider, which still impacts your flood coverage.

Don't let the roadblocks insurance companies throw up in your way stop you from protecting your home from floods. When it comes to your home and your family nothing's more important that making sure your home is protected from anything Mother Nature has to offer.

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