Flood Insurance—Who Needs It?

Homeowners’ policies don’t cover flooding. You can only get flood insurance from the federal government’s National Flood Insurance Program (NFIP). It boils down to this: if you don’t have an NFIP policy, you don’t have flood coverage.
FEMA’s National Flood Insurance Program: www.fema.gov/nfip/
Even though you may live outside Special Flood Hazard Area (SFHA) boundaries—also called one-in-100 years flood elevation—the low cost of a NFIP policy may still be worthwhile.
Storm drains overflow and flood adjacent areas, canals break, and new developments may channel water where it’s never gone before—your basement.
In fact, 25 percent of the 595,000 claims the Federal Insurance Administration has paid out since 1978 have been to people outside the flood zones.
To find out if your home is in a flood zone, contact your local building or planning department and ask to see the flood insurance rate map published by FEMA. If your zone designation begins with an A or V, you’re in a flood plain. And to obtain FHA, VA, or conventional financing, you’ll need proof of flood insurance prior to closing. Also, coverage is not limited to homeowners; tenants can purchase their own flood insurance policies to cover contents. Flood insurance can be purchased in any community that has agreed to adopt flood plain management programs. Currently, about 18,000 of the nation’s 22,000 cities, towns, and counties are members. Average premiums in high-risk areas are about $300 a year. The rate goes up according to the value of the property and its location. But coverage in low and moderate risk areas is as low as $85 a year.
Coverage tops out at $250,000, with an additional $100,000 for contents. The policy also covers up to $500 for removing contents to a safe location, up to $750 for sandbagging, pumping, and other preventive costs.
Flood insurance policies are sold through local insurance agents. The company that handles your homeowner’s policy can probably add this coverage for you.