Flood insurance cover typically consists of two categories:
Building or structural coverage
The first type of flood insurance coverage is called building or structural coverage. This type of coverage includes the home, foundation, plumbing, electrical and HVAC systems, as well as appliances, built-in cabinets, carpeting and flooring. This is the main type of flood insurance, with contents coverage considered a secondary type of flood insurance.
Contents coverage in flood insurance refers to personal belongings and typically includes furniture, clothing, electronics, curtains, area rugs, non-built-in appliances, etc. Contents coverage is also referred to as personal property coverage and is not automatically included in flood insurance. You should ask your provider to add contents coverage to your building or structure coverage.
Residential and commercial flood insurance coverage
Flood insurance coverages typically include:
Residential properties: maximum building coverage is $250,000 and contents is up to $100,000
Commercial properties: maximum construction coverage is $500,000, and up to $500,000 for contents
Flood insurance coverage is the same regardless of the flood insurance provider. This is because they are federally regulated. Building coverage and contents coverage have separate coverage limits. However, most flood insurance providers will allow you to choose your deductible, which is the only flood insurance cost you have control over.
“Unlike Traditional Homeowners Policies, Flood Policies have the Highest Coverage Limits regardless of the Value of your Home, because if your Home Floods, you will likely not have a Total Loss. The Cost of Replacing the Part of Your Home That Flooded Will Be Significantly Less Than It Would Cost to Replace Your Home. “
– Brad Goldsberry, Agency Producer, Nate Bingel Agency at Farmers Insurance
National Flood Insurance Program
The National Flood Insurance Program is a national government program funded by FEMA and regulates flood insurance costs. It provides flood insurance policies but does not directly sell them. Instead, flood insurance is provided by licensed flood insurers.
FEMA aims to reduce the impact of flooding and make flood insurance affordable. It also encourages communities to adopt flood management policies that reduce the potential damage caused by flooding.
In addition, the National Flood Insurance Program promotes the purchase and retention of flood insurance. Plus, you can get flood and disaster information. This includes tips on buying flood insurance, how to reduce flood insurance costs, and what to do during a natural disaster.
Who needs flood insurance
You need flood insurance if your primary residence or investment property is in a high-risk flood zone, which includes low-lying coastal areas and areas near bodies of water. Flood insurance is also appropriate if you have a mortgage on your property, as most lenders require it due to federal mandates.
FEMA also offers a flood zone map so you can see if flood insurance is right for you based on your property.
Flood insurance coverage typically includes:
Property investors who own investment property in a flood zone
Holiday rental property owners who own property in a flood zone
Homeowners who own property in a flood zone
Property owners with property in a flood zone, as the lender usually requires flood insurance before accepting a mortgage loan on the property
Those who are buying property in a flood zone or a low-lying coastal area near a body of water