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Florida homeowners should consider purchasing flood insurance — even outside a high-risk flood zone. After all, it only takes an inch of water to cause costly damage to a home. While most homeowner policies do not cover flooding, flood insurance is available from private insurers or the NFIP. The cost of premiums depends on location and individual property risks, a new system called Risk Rating 2.0.
Location
The location of a property is the most important factor to consider when choosing a flood insurance policy. The more a property is located within a flood zone, the higher its risk of flooding and the greater its premium. However, even homeowners in low-risk areas should purchase a flood policy to protect their homes and belongings from damage caused by flooding. Standard homeowner’s insurance typically does not cover flood damage, so flood coverage is a must for most people. Moreover, a home’s proximity to water sources and elevation above sea level will also impact the cost of a flood policy. Homeowners can save money by building their homes to a minimum of 1 foot above the base flood elevation indicated on a FEMA map, installing gutters and downspouts, or investing in a drainage system. Homeowners can find affordable flood insurance in Florida by shopping around and considering a private insurer that offers flexibility in coverage options and competitive pricing. They should choose a provider with a high AM Best rating, which indicates a financially stable company that will pay out claims promptly.
Coverage Amount
Unless your policy includes a special endorsement, your homeowner’s insurance typically doesn’t cover flooding caused by tropical storms or hurricanes. If you live in an area prone to these events, shopping around for Florida flood insurance quotes may be worthwhile. The type of coverage you select will also impact your rate. You can choose to get replacement cost or actual cash value coverage for your home and whether you want to include your personal belongings in the policy. Generally, you’ll pay more for higher coverage amounts, but you’ll be better protected if disaster strikes. The Florida OIR has worked to expand the private insurance market, which offers alternatives to federally regulated NFIP policies. Private companies usually provide a lower wait time for a policy and more comprehensive coverage options like additional living expenses and replacement costs. These perks aren’t available through the heavily regulated NFIP, so comparing private insurance rates is important to find a policy that fits your needs and budget.
Coverage Type
Besides the home’s location, homeowners must also consider the type of flood coverage they want and the coverage limits. NFIP policies typically cover only buildings and personal belongings (contents). At the same time, private insurers can offer more flexible coverage options, including building and contents, building and structural losses with or without contents, and loss of use coverage that can help pay for expenses such as hotel stays and restaurant meals during recovery. The type of flood insurance policy is crucial to remember because it can significantly affect the premiums and coverage limitations. For example, an approach that covers both the structure and its contents will usually cost more than one that only covers the frame. In addition, homeowners who live in areas with a moderate to minimal risk may qualify for a low-cost preferred risk policy. This type of flood insurance can be a great choice for people who don’t need the federally mandated coverage from the NFIP but still want to protect their property against flooding from hurricanes, high river or lake levels and other natural disasters.
Deductibles
Homeowners insurance does not cover flood damage unless you have a special endorsement, so getting separate flood coverage is critical. Suppose your home is located in a FEMA-designated flood zone (generally those with an A, V or X designation). In that case, you must purchase a National Flood Insurance Program policy. Most mortgage providers require that you carry this type of insurance if your property is in a high-risk area.
There are several different deductible options to consider when purchasing this policy. The building deductible covers any water damage to the structure of your home, while the contents deductible will cover personal items like furniture and electronics. Location and individual property risks impact premium rates for this type of insurance, so comparing quotes from several companies is important. Private insurance providers often offer higher coverage limits than the NFIP, and they may have additional policies or add-ons that can protect your home and belongings against a flood. They may also have a faster claims process.
Policy Exclusions
Flood insurance protects homeowners from damage to their homes and personal property from rising water. Homeowners and renters can obtain this insurance from the National Flood Insurance Program if their community participates. Many mortgage lenders require that buyers get this coverage because they have a financial interest in the property and want to protect their investment. The cost of a policy depends on the location and individual property risks, which include proximity to flooding sources, height of the first floor, construction type and more. The number of structures on the property (garages, sheds and fences) can also impact the premium costs.
Keeping up with maintenance and implementing mitigation measures can help reduce the risk of flood damage to your Florida home. For instance, ensuring proper drainage on your property could help redirect rising water away from the foundation. Similarly, other mitigation measures to consider are installing gutter systems and landscaping with plants that can help absorb moisture. In addition, a flooded home left unattended can develop serious structural problems, which may not be covered by a standard homeowners or renters policy.
